Shortage of pilots, cabin crews 'far more serious' than visible: Capa India

Labour crisis likely to accentuate due to multiple issues, says aviation consultancy firm

A shortage of pilots, cabin crew members, and other key aviation sector employees is far more serious than estimated or visible, said aviation consultancy firm Capa India on Wednesday. Moreover, Indian carriers would be adding 82 planes to their fleet in the financial year 2024-25 (FY25), taking the total number of commercial aircraft in the country to 812.

Vistara had in the March-April period cancelled 10 per cent of its flights due to sick leave taken by some pilots, amidst alleged dissatisfaction with tight duty schedules and new salary packages offered to them as part of the airline's merger into Air India. In September last year, Akasa Air was forced to cancel about 24 daily flights as about 43 pilots abruptly resigned, without serving their mandatory notice periods, to join rival carriers.

 

"The shortages of pilots, AMEs (aircraft maintenance engineers), cabin crew, flight dispatchers and others is far more serious than currently estimated or visible. Introduction of the new FDTL guidelines – likely this year – and poaching by Middle Eastern carriers is likely to accentuate the labour shortage issue," said Kapil Kaul, chief executive officer and director of Capa India, at the firm's annual summit, referring to flight duty time limitations.

"Additionally, aligning employees to best practices and high productivity norms, will result in variability in compensation which is linked to performance. Whilst this may lead to short term pain it will lead to long term productivity benefits," he said.

Vistara and Air India Express are expected to reduce losses significantly in FY25. The industry's average fare in FY24 was almost the same as in 2022-23. "IndiGo's average airfare in 2023-24 was just 1.3 per cent higher than 2022-23 but 36 per cent higher compared to 2019-20."

Airlines are pursuing a rational pricing regime for the first time, which has been maintained for the last 12-18 months. "The industry achieved record yields (revenue per seat per kilometre) in Dec-2023,” he said.

Value added tax on aviation turbine fuel has been reduced to be in the range of 1-5 per cent in most states across the country. “Only five states continue to hold out with rates of 20-30 per cent, although they account for a significant proportion of national traffic. However, we expect that they even they will rationalise taxation in 2024-25 or 2025-26.”

The country’s aircraft fleet is set to double by FY30. “It took the Indian industry about 90 years from the time of first commercial flight to reach the fleet of 700 aircraft. But the rate of growth is so strong that carriers could add a further 600-700 planes in just the next 5-7 years.”

Although terminal and runway infrastructure is being developed, greater attention is needed to ensure that there are sufficient parking bays available to support fleet expansion, he said.

The productivity of single and dual runway airports needs to be increased to international benchmarks, he said, citing Gatwick in London as an example.

“Corporatisation of ANS (air navigation services that are with the government-run Airports Authority of India) is necessary if airspace bottlenecks are to be addressed. But leaving corporatisation aside, restructuring and optimisation of ANS Is essential if the projected growth is to be accommodated,” said Kaul.

Cause for concern
 

Indian carriers would be adding 82 planes to their fleet in FY25, taking the total number of commercial aircraft to 812
 

In the March-April period, Vistara cancelled 10 per cent of its flights due to sick leaves taken by some pilots
 

In September last year, Akasa Air was forced to cancel about 24 daily flights as 43 pilots resigned abruptly
 

Greater attention is needed to ensure that there are sufficient parking bays to support fleet expansion
 

The productivity of single and dual runway airports needs to be increased to international benchmarks