Akasa Air: Akasa’s sky-high salary hikes may force peers into flying through an air pocket

Akasa Air, India’s newest airline, is leading on pay hikes for pilots, marking a reversal of the pandemic-era aviation squeeze that saw salary cuts and job losses globally, said people with knowledge of the matter.

This is likely to set off salary increases at other carriers to ensure they have enough pilots as air traffic recovers amid fleet expansion and Gulf carriers embarking on a hiring spree, they said.

Akasa raised pilot pay by an average 60% — captains will start at Rs 4.5 lakh a month and first officers at Rs 1.8 lakh — from October. This is against Rs 2.79 lakh and Rs 1.11 lakh, respectively, at present. Depending on experience and hours flown, the pay could be higher. At the maximum limit of 70 hours per month, a captain can earn Rs 8 lakh, about 28% more than Rs 6.25 lakh now, said the people cited above.

The carrier needs more pilots for the rapid expansion it has planned, said people with knowledge of the matter. The airline currently has four Boeing 737 Maxs and plans to induct 18 more planes by March 2023. An airline typically needs 12 pilots per aircraft, including reserves.

“The airline needs to build up a pool of pilots and a solid bench strength,” said a person aware of the development. “With Tatas starting expansion and hiring pilots, and Middle East airlines opening up rapid hiring, there is little option other than to hike pay to attract more pilots.” Tata group’s plans include revival of Air India and expansion of Vistara.

Akasa Air didn’t respond to queries.

The move will have a cascading impact as other Indian carriers will have to raise salaries to prevent attrition. The senior management of Air India Express, which is also planning an expansion, held a meeting over the weekend to assure its crew of an improvement in the salary structure, said people with knowledge of the matter.


Race with IndiGo


Akasa’s pay package is 8-10% percent higher than what market leader IndiGo will be paying its captains from November, by when salaries at the company will be fully restored, having been cut by nearly 28% during the pandemic downturn.

“IndiGo expects a race in hiring pilots and has prepared by building a bench strength,” said an airline executive.

The airline, which operates around 1,500 flights, has resumed hiring of pilots for its Airbus A320 fleet. It has also increased the pace of converting first officers to captains to almost 30 pilots per month.

“Upgrading eligible first officers to captains is also a form of crew retention policy,” the executive said. “The company’s rapid expansion pace means that the wait time for upgrade is fairly negligible, as compared to competitors.”


Gulf Competition


Aggressive hiring by Middle East airlines has also sharpened competition, as the pay package offered by the likes of Qatar and Emirates is significantly higher than domestic airlines, along with the experience of flying wide-body aircraft, which also comes with higher allowances.

Qatar, which is hiring Boeing 777 and 787 pilots, is holding road shows in Delhi and Mumbai this month. “Qatar Airways always had a special bond with India and with this recruitment drive, we are further solidifying our commitment to the market,” said its chief executive Akbar Al Baker. “Keeping the spirits high, we invite applications from the talented pool of Indians who aspire to be a part of the Qatar Airways family.”

The carrier is scaling up operations ahead of the football World Cup that will be held in Qatar in November and December.

Experts said Indian airlines will face increased employee costs from FY25, with stiff competition for pilots, reminiscent of a similar squeeze before the pandemic, when there was a pilot shortage amid a surge in air travel. “Higher attrition rates will lead to increase in employee cost for Indian airlines,” said Kapil Kaul, chief executive, India and Middle East, at aviation consultancy firm CAPA.

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