Air India Ltd will soon announce salary increases across verticals, beginning with pilots, as competition for cabin crew and pilots heats up in the industry.
It will be the Tatas’ first performance review since taking over the airline. According to an industry insider familiar with Air India’s plans, increments of 8-10% are likely to bring parity between expats and Indian pilots.
“The first round of hikes could happen in the next few months. Pilots will be the first to get hikes. Salary adjustments will also be made for the cabin crew and other officers.”
According to an Air India executive, the decision to raise salaries was motivated primarily by a pilot shortage. “The pilot shortage is forcing airlines to reconsider their strategies.” The reason for the salary increase is primarily to keep talent from leaving to work for another airline in India or abroad. Because Air India has placed a large order, it will require capable and dependable personnel to operate that equipment.”
In February, the airline announced plans to hire over 4,200 cabin crew trainees and 900 pilots in 2023 as it expands domestic and international operations. The announcement came after Air India placed a massive order for 470 aircraft from Boeing and Airbus to help it expand. Under the terms of the agreement signed with aircraft manufacturers, the airline also has the option to purchase 370 more planes. Air India previously stated that it will lease 36 aircraft, two of which are Boeing 777-200 LRs.
The pay increases will have no effect on the salary structures of Vistara pilots and cabin crew, as the latter remains an independent entity and its merger with Air India will take place after regulatory approvals are received.
According to a report by aviation consultancy firm CAPA India-Centre for Aviation, Indian airlines are expected to place orders for 1,500-1,700 planes over the next two years. Currently, over 700 commercial aircraft are in service in India, with an additional 1,000 planes on order.
As a result, airlines are becoming increasingly wary of competition and are planning to secure enough crew to handle the volume. The larger concern is for the wide-body fleet operated by Vistara and Air India, as pilots frequently leave for middle-eastern airlines due to lucrative offers. The walk has been planned to reassure pilots of the Tata Group’s vision for Air India. “It is expected to boost pilot confidence in the group at a time when other airlines are hiring,” another Air India executive said on condition of anonymity.
Since the Tatas took over Air India, the company has decided to align its employees’ benefits and salaries. The airline, which had around 8,000 permanent employees until a year ago, is also looking to reduce it by another 2,000 as part of a second voluntary retirement scheme (VRS). In July 2022, 1,500 employees opted for the first VRS.
“We’re thinking about how we can do things differently in the future. One, in order to support our growth and improve our capability, we must attract and retain talent. We need to adopt a more performance-oriented culture with clear objectives and consequences for any underperformance.”
Said Campbell Wilson, chief executive officer and managing director
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