Today's Other Headlines

Air India 787. Courtesy, Boeing

Indian flag-carrier Air India’s (AI) long-haul flights on international routes continued to be crippled as the pilot strike enters the 15th day, overshadowing the carrier’s Boeing 787 delivery later this month (ATW Daily News, March 22).

Pilots from the Indian Pilots Guild (IPG) have hardened their position and so has the government. The minister for civil aviation Ajit Singh invited the airline’s other 13 unions to a meeting but refused to talk to the striking pilots group. More than 100 pilots have already been sacked.

The pilots’ sickout is a result of the government of India’s decision to merge India’s two public sector airlines—Indian (IC), which ran domestic and regional routes, and AI, which operated medium- and long-haul international flights. Though the airlines were merged by government diktat four years ago, they remain deeply divided. Both had completely different pay scales, promotion policies and work cultures.

AI was started by the Tata group in the 1932 and later nationalized by the government. IC was formed by merging half a dozen small domestic carriers that operated in the 1950s. Despite the merger, employees in almost all sections continue to work as if they belong to two separate carriers.

In what may seem like a bizarre situation to outsiders, pilots from the AI part of the airline are objecting to the management’s decision to send their brethren from IC for flight training on the 787.

Pilots from IPG said if pilots from the other group are allowed to fly the 787s, they will lose out on growth opportunities. The loss-making airline is shrinking its fleet and is likely to lease out more aircraft as it struggles to stay afloat (ATW Daily News, April 16). The strike has cost the airline about $40 million so far.

The government has appointed a committee, led by retired judge DM Dharmadhikari, to evaluate the salary structures of employees and suggest a new parity structure. Discussions continue with the unions to bring in a new common structure so employees will have similar conditions of employment.

Southwest Airlines (SWA) has reached a tentative agreement with Delta Air Lines (DL) and Boeing Capital Corp. to sublease all 88 AirTran (FL) Boeing 717 aircraft to DL, transitioning three aircraft per month over a three-year period beginning in the second half of 2013.

DL and SWA are still in talks to reach a final agreement with all parties related to aircraft leases. Once final, all 717s would depart the fleet by 2015.

"This is a very complex transaction that requires time and close coordination with multiple parties,” SWA EVP and COO Mike Van de Ven said. “While we do have a tentative agreement with Delta, final details must be completed with all parties before a binding agreement between Delta and Southwest can be completed."

SWA said it currently plans to keep its total fleet count “relatively flat” as the 717s transition to DL, and will replace FL 717 flying with 737 aircraft. It will maintain service to all previously announced airports, it stressed.

“All pilots would train and transition directly into the airline's 737 fleet as the 717s are reduced,” SWA said. “AirTran flight attendants and maintenance personnel are currently trained on both aircraft types.”

Qantas A380. By Rob Finlayson

The Qantas Group (QF) announced it will split the carrier’s international and domestic operations into two distinct businesses as part of its five-year transformation plan launched in August 2011 (ATW Daily News, Aug. 17, 2011).

 “Qantas International and Qantas Domestic—currently combined as ‘Qantas Airlines’—will be formally managed as two distinct businesses,” a QF statement said. “Each will have its own CEO and its own operational and commercial functions with financial results to be reported separately.” The new structure will be effective July 1.

The restructure will strengthen the Qantas Group’s portfolio and help deliver its previously agreed strategic goals, CEO Alan Joyce said.

The Group also announced a number of executive management changes, including appointing former QF Frequent Flyer CEO Simon Hickey to CEO-QF International; QF Airlines-operations group executive Lyell Strambi to CEO-QF domestic; Group executive, strategy and technology Jayne Hrdlicka to CEO-Jetstar Group; Group executive-international strategy Lesley Grant to CEO-QF Frequent Flyer; and Gareth Evans to CFO.

Madrid-based Amadeus IT Group has secured a loan for €200 million ($255 million) from the European Investment Bank (EIB) to finance research and development for a variety of IT projects for airlines, airports, hotels, and rail between 2012 and 2014.

The loan, which has a nine-year maturity, will be awarded in two tranches from May 24: one with a notional value of €150 million, with semester repayments after the third year; and a second with a notional value of €50 million, with semester repayments after the fourth year.

In a statement, Amadeus said that “continued investment in innovative IT solutions is central to the Amadeus ethos.” The company invested approximately €2 billion in R&D between 2004 and 2011, of which €364 million, representing 13.4% of revenues, was invested in 2011 alone. More than 4,000 people work at Amadeus’ 16 R&D centers around the world, which in Europe include the central R&D facility in Nice, plus London, Antwerp, Aachen, Frankfurt, Strasbourg and Warsaw.

The EIB is the long-term lending institution of the European Union and is owned by the member states.