Akasa Air: The Boy Who Cried Wolf

Just after its first anniversary celebrations got over, Akasa Air, the newest airline in India's tumultuous aviation sector, suddenly began to cancel flights quite often. On social media, many complaints by passengers of the airline began to appear. WhatsApp messages from fliers claimed that something was amiss at the carrier since flights were being cancelled quite regularly and with little forewarning.

Then on September 20, the airline moved the Bombay High Court against five pilots, seeking over ₹21 crore in damages from each of them. The claim was filed against the set of commanders the airline said resigned without fulfilling the notice period specified in their contracts. The airline spokesperson said that the "pilots left without adhering to even a 24 hour notice".

The airline's curiously aggressive and controversial stance against the pilots surprised many in the aviation industry, including the pilot unions and rival airlines, with many calling the actions "immature", "absurd" and "hypocritical". A few other absurdities relating to the way airlines and the regulator have been operating in India also came under the lens.

The airline's actions triggered anger across the pilot community with many IndiGo and other airline pilots speaking up in favor of the targeted five. To begin with, many pilots across airlines pointed out that Akasa had neither trained nor spent large sums on training. Rather, it had poached many pilots from rivals such as SpiceJet, Go First and Air India Express when it began. A SpiceJet source confirmed that at least 44 of its pilots, of which only 3 were first officers, left the airline to join Akasa at the time it started, most without serving the notice period or any notice period whatsoever. Since SpiceJet had curtailed its own flying due to a variety of reasons, it had no objections to letting the commanders find alternatives.

According to a source in Air India Express, the airline too lost at least 15 commanders to Akasa without serving their notice period but the airline did not even think of "suing" or taking any such action against the pilots. "The pilots just submitted resignations and left. We informed DGCA as a matter of routine. While the pilot's actions were wrong, we felt there is not much to be done but move on," he says. That is why the rivals are quite taken aback at Akasa's move since, in fact, they have spent more money on training these pilots over the years.

In response to an emailed questionnaire, Akasa refused to divulge its training budgets and said it takes responsibility for the quality and training of all its pilots whether they are trained in-house or by a third party. It added that due to the "uncompromising culture of safety, we likely spend more than most airlines". The airline added that it prides itself in being "highly ethical with the highest standards of governance".

It added that as part of Akasa's pilot hiring process, "we do not knowingly hire pilots who have not completed their full notice period unless there has been a significant and sustained breach of contract by their previous employer that we can verify. Some examples of these scenarios are – when pilots are not getting paid because of an airline's bankruptcy or financial trouble. Once such significant and sustained COVID-19 pay cuts were reversed, we stopped hiring such pilots with immediate effect, unless they served their full notice period."

But pilots and DGCA sources maintain that "the airline is getting a taste of its own medicine" and that it appeared to be "taking a leaf out of former rival Go First's books which was also very quick to take its employees, including pilots to court whenever it suited them," says a senior airline commander, who is currently with a Gulf carrier, after he left Go First. He adds that this does not "bode well" for Akasa, since "we all saw what happened with Go First".

Pilots further argue that instead of filing suits, the airline should introspect and find out why pilots are resigning en masse. "Pilots do not like change as every time we change jobs or aircraft, it means a minimum of six months of time lost. So someone should ask Akasa management to take a look inward and see why 40-odd pilots want to leave at one go. This is highly unusual if all is going well," says former Jet commander and head of Airline Pilots' Association of India (ALPA) Sam Thomas.

According to sources, the heart of the issue is that the airline has changed the pilot's employment terms unilaterally and "is equally in breach of the contracts signed". At the time of hiring, the airline offered the pilots a smaller fixed pay component and a higher variable component based on the number of hours flown. But when flying increased - as it did once the airline added aircraft and new stations - pilots argue that the airline found the outgo to commanders was higher than anticipated and so it unilaterally changed the terms, lowering the amount offered on a per hour basis of flying while raising the fixed amount. "Many of the pilots joined the airline only for the high variable pay since Akasa was not offering home base and these pilots had to rent accommodations outstation to take up the job," explains a senior commander in the know.

In response to a query on this, the airline did not reply to the direct question of whether it had unilaterally changed the terms of the contract. Instead it said: "We have increased our overall compensation for pilots substantially on three separate occasions since the start of our operations in August 2022 and this has been well covered in the media. It is disingenuous for any employee to suggest otherwise."

To add fuel to an already burning fire, one day after it filed the case against captains in Bombay High Court, it filed another case against DGCA, the aviation regulator, in the Delhi High Court, arguing that it should intervene to stop 43 of the airline's pilots who appear to be on the verge of resigning without fulfilling their notice periods as this would lead to a crisis for the carrier. A news report said that the airline's lawyers claimed before the court that the matter was so serious that it (the airline) was facing an existential crisis and that it might "shut down" if abrupt resignations of 43 pilots were not prevented.

This move backfired further and created a new unanticipated crisis for the airline's management. The language used by the airline's lawyers to make a case — as lawyers are notorious for doing — exaggerated the fallout of the resignations and told the court the airline could "even shut down", resulting in a media storm after the new report appeared across platforms and publications. In a bid to tilt the court in its favor, the lawyers painted a picture of gloom and doom and said that the airline cancelled 600 flights in August and would be forced to cancel a similar number in September, leading to a slip in its market share for the month. An Akasa insider said that a majority of time and effort of the top management over the next few days went in "dousing these fires".

Then, to add to the airline's woes, DGCA in reply firmly declined to intervene, making it clear to the court that the matter was one between the airline and its pilots and not something the DGCA could intervene in. Further, it pointed out that the six month and one year notice period CAR (civil aviation requirement) was as it is under dispute and could not be acted upon.

According to DGCA sources, this CAR that came into being in 2017 is unjustified and a legacy left by a bunch of DGCA and MOCA (Ministry of Civil Aviation) officials. It stipulates that commanders must give a notice period of one year and first officers six months when they choose to resign from one airline and join another, on grounds of "passenger inconvenience" as pilot shortages lead to flight cancellations.

They argue that safety bodies have no real role to play here, citing the example of the Federal Aviation Authority (FAA) and the European Union Aviation Safety Agency (EASA), neither of which interferes in what goes between airlines and their employees. "The logic behind this stipulation was very weak from the start and had it not had powerful airline owners backing it, it should have been consigned to the dustbin long ago," says a top government source.

Pilots have also pointed out that whenever they have approached DGCA or MOCA to intervene when airlines default on payments (it happened time and again with Kingfisher, Jet and Go First - on matters related to unpaid salaries, tax deducted at source and other dues that fall in the category of statutory payments) they receive no support. "DGCA and MOCA routinely refrain and curtly inform us that these matters are directly between us and our employer. So this interference seems very selective," points out a senior commander. This matter — of the unreasonably long notice period — has been hanging fire since it was challenged in court and is currently sub-judice.

Over the weekend, the airline allays fears among its employees and the public about an imminent closure. In response to pilot shortage queries by Fortune India, the airline clarifies that it had not shut down any stations due to pilot shortage and has a current strength of over 450 pilots, up from around 340 in April 2023, signifying a 30% increase in the last five months to meet the needs of hiring well in advance of its growth requirements. Further, it says that it has 60 signed commitments from pilots that are in various stages of their notice period and will join it upon completion. "This puts us in a strong position to double our current pilot strength in the next 18 months," it adds.

Even as the airline bent over backwards to defend and douse the fire its misguided actions created, airline industry insiders, rival airlines, pilot unions and MOCA officials argue that the whole episode has been a PR disaster and has left Akasa with egg on its face. "What has the airline gained from its actions? Bad press, wasted time and effort of management and an atmosphere of further distrust with its staff," says one former MOCA secretary. Industry sources maintain that Akasa has proved it is the youngest player in the sector by displaying its immaturity and lack of foresight. This is likely to go down as the most forgettable week in the airline's short history.