Consolidation brings savings for airlines
While in the past two years salaries of these personnel went up by 30-40%, it has undergone a correction in the past six months.
By Nirbhay Kumar & Vishakha Talreja, TNN |
NEW DELHI: Consolidation in the Indian skies has started yielding results for airlines. While cheapest airfares have shown a marginal increase re-cently — helping airlines come out of the red — a “correction” in salaries and perks of technical personnel, including pilots, in the past six months is likely to translate into lower operating cost for the carriers.
M&As in the aviation space have brought economies of scale for airlines. “To some extent, salaries of pilots, aircraft maintenance engineers and other technical personnel have softened. While in the past two years salaries of these personnel went up by 30-40%, it has undergone a correction in the past six months,” says Centre for Asia Pacific Aviation (CAPA) India CEO Kapil Kaul.
The correction has happened after the three mega-mergers in the domestic skies and the disparity in salaries among various airlines has also started narrowing.
“Airlines are pretty much aligned now as far as salaries are concerned. The sporadic increases in salaries that happened in the past two years have come down now,” says Surajit Banerjee, vice-president-HR, SpiceJet. Agrees a senior Air India official: “There are increased synergies between airlines now.
There are only minor differences in salaries of pilots working for different airlines. Also, stricter regulations such as a six-month notice to be given before a pilot leaves, have given increased bargaining power to airlines,” he said.
“The correction would continue to take place over the next 12 months till regional airlines take off. But once regional airlines take wings and the existing carriers start their expansion in the beginning of 2009, salaries and perks would again go up,” Mr Kaul added.
Some low-cost airlines are, however, yet to realise the benefits. “Undoubtedly salaries of technical personnel has stabilised, but operat-ing costs have not yet gone down as it has been only six months since the consolidation took place,” GoAir MD Jeh Wadia said.
M&As in the aviation space have brought economies of scale for airlines. “To some extent, salaries of pilots, aircraft maintenance engineers and other technical personnel have softened. While in the past two years salaries of these personnel went up by 30-40%, it has undergone a correction in the past six months,” says Centre for Asia Pacific Aviation (CAPA) India CEO Kapil Kaul.
The correction has happened after the three mega-mergers in the domestic skies and the disparity in salaries among various airlines has also started narrowing.
“Airlines are pretty much aligned now as far as salaries are concerned. The sporadic increases in salaries that happened in the past two years have come down now,” says Surajit Banerjee, vice-president-HR, SpiceJet. Agrees a senior Air India official: “There are increased synergies between airlines now.
There are only minor differences in salaries of pilots working for different airlines. Also, stricter regulations such as a six-month notice to be given before a pilot leaves, have given increased bargaining power to airlines,” he said.
“The correction would continue to take place over the next 12 months till regional airlines take off. But once regional airlines take wings and the existing carriers start their expansion in the beginning of 2009, salaries and perks would again go up,” Mr Kaul added.
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Some low-cost airlines are, however, yet to realise the benefits. “Undoubtedly salaries of technical personnel has stabilised, but operat-ing costs have not yet gone down as it has been only six months since the consolidation took place,” GoAir MD Jeh Wadia said.
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