AI raises bond amount to Rs 1 cr for new pilots to stem poaching

Air India has hiked the bond amount for new senior pilots joining the airline from Rs 50 lakh to Rs 1 crore. This comes after a series of resignations by new pilots who had undergone training but left the airline for greener pastures.

The airline had made new pilots sign a bond of Rs 12 to 14 lakh in the recent past, which is now being revised upwards to stem their migration to rivals after acquiring high-cost training at the expense of the national carrier.

“A new pilot joining the airline will not be actually paying anything to the airline upfront. The bond amount constitutes of two components. One is a bank guarantee and other is a surety bond, an Air India official told Hindustan Times.

For a new A 320 pilot, the training cost is anything between training cost is between Rs 4 to 12 lakh. So the pilot will have to provide a bank guarantee where in if he leaves the airline, before a period of five years, the bank which has stood the guarantee on his or her behalf, will refund the training cost amount to the airline. If the pilot had stayed on, the bank guarantee would have been deducted in instalments over the period of five years.

The second component of the bond amount is an affidavit signed by the pilot, stating that if he leaves the airline before a period of five years, he is liable to pay the entire Rs 1 crore bond amount to the airline.

“The Bank Guarantee and amount of liquidated damages as indicated in the Service Agreement and Surety Bond for Service Agreement shall be Rs.1 Crore in aggregate. Candidates would be required to give the Bank Guarantee equivalent to training cost and Service Agreement and Surety Bond for Service Agreement for the remaining amount, i.e. Rs. 1 Crore minus amount of Bank Guarantee,” Air India said in its circular.

For example, if the training cost is Rs12 lakh, the pilot would be required to furnish a bank guarantee and and a surety bond for the service agreement of Rs 88 lakh.

So in essence, airline has tweaked hiring norms after a number of pilots quit the carrier and moved to private airlines after acquiring high high-cost type-rated training at its expenses.

As many as 173 Air India pilots have resigned from the national carrier since 2012, with the maximum being those operating the narrow body Airbus A320 family aircraft, Government had said in Parliament recently.

Of these, 72 pilots operating the narrow-body Airbus A320 family fleet have resigned, while 38 pilots each of Boeing 787 Dreamliner and Boeing 777, eight of Boeing 747 and 17 of Boeing 737 fleet have quit between 2012 and October this year, Civil Aviation Minister Ashok Gajapathi Raju had said during the Winter session of Parliament.

98 trained pilots quit Air India between April 1, 2014 and October 30 2015.

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