People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 43

November 02, 2008



Privatisation Of Profits And  Nationalisation Of Losses

Tapan Sen

ON October 14 , 2008, around 850 cabin crew and ground staff of Jet Airways in Mumbai discovered in the morning that they had been fired from their jobs. No prior notice or anything of the kind, they only came to know that they are no longer required in Jet Airways when they enquired over the telephone as to why their pick-up vehicle had not turned up. The same was the experience of around 300 Jet Airways employees in Delhi and the next day 21 Jet Airways employees in Kolkata got a similar retrenchment communication.

The next day, October 15, 2008, witnessed an arrogant communication from the Jet Airways Authority that whatever they have done (by way of such mass-retrenchment) is in order and more employees are going to be thrown out and this is not illegal because all of them are temporary employees (on contract service and mostly probationers) and the company is in severe financial crisis. It is clear that employees are taken on contract and kept on a longer probation to ensure that they can be paid less and can be fired at any time.

On the same day, the Air India Authority announced their novel intention of laying off or sending on leave without pay around 15,000 employees. The design behind such an announcement was obviously to legitimise barbarous mass scale retrenchment by Jet Airways. The same day also witnessed an indulgent reaction to what Jet Airways had done from the Civil Aviation ministry, along with a complaint of non-cooperation from other ministries of the government, in approving a bail out package, from the public exchequer, for the private airways company. Up to October 15, the events unfolded and reactions from the ministry, Jet Airways, Air India etc., all together exposed a well orchestrated symphony of a single grand plan. The plan is to legitimise summary retrenchment by Jet Airways and also create the ground for another loot from the public exchequer in the form of the so called bail-out package for the private airways industry, in the form of a longer credit period (without interest) for fuel charges, reduction of taxes and maybe many other hidden elements.

But all that was not to happen. On October 15, the retrenched Jet Airways workers refused to accept the arrogance of the employer lying down and the Mumbai and Kolkata airports witnessed militant demonstrations of the Jet Airways employees demanding withdrawal of the retrenchment order. The employees of Air India and Airport Authority joined them in solidarity. This continued on October 16 and the leadership of the Air Corporation Employees Union, representing the Air India/Indian Airlines employees and the Airport Authority Employees Union representing the employees of Airport Authority, conveyed to the Jet Airways management in Delhi to immediately reinstate the retrenched/laid-off employees or face consequences of bigger resistance struggle.

On October 15 itself, CITU opposed the mass scale retrenchment through a press statement and demanded resignation of the Civil Aviation minister for his visible indulgence in the dubious ploy of Jet Airways. On the same day, the CITU general secretary, Mohammed Amin, MP, wrote to the Union Labour minister, Oscar Fernandes, to intervene strongly against the totally unlawful action of mass-retrenchment by Jet Airways, force them to reinstate all the employees and stop Jet Airways operations if the management does not respond positively.

It appears that the Union Labour minister responded immediately and on October 16, 2008 the deputy chief labour commissioner (central) called the CITU, along with Jet Airways management for conciliation meeting on the issue to be held on October 17, 2008 in Mumbai. Vivek Monterio, secretary, Maharashtra state CITU was deputed to attend the conciliation meeting on October 17, 2008. Meanwhile, on October 16, 2008 night itself, probably after receipt of the notice from the deputy CLC (central), the Jet Airways management announced its decision to withdraw the retrenchment/lay-off order and to allow the employees to resume their duty. The Jet Airways management communicated the same to the deputy CLC(central) in writing on October 17 itself.

On October 17, 2008 we saw in the print media the story of a sleepless night spent by Naresh Goyal, owner of Jet Airways, in his agony and anxiety for the employees, retrenched without his knowledge. It was not mentioned as to which night (14th, 15th or 16th) was referred to.

On the same day, the Civil Aviation minister claimed to have intervened in the matter to end the impasse. On the same day, the Petroleum minister appeared to be softer in his statement about allowing more concessions to private airlines on aviation fuel account and maybe a longer credit period (without interest?), for payment for aviation fuel is in the offing for the private airlines and cut in excise duty as well.

Whosoever wants to take the credit, the CITU welcomes the reinstatement of the Jet Airways employees and congratulates them for their protest demonstrations. The CITU also congratulates the Air Corporation Employees Union and Airport Authority Employees Union for the immediate response of the employees of Air India and Airport Authority to the solidarity call and for joining the demonstration. This development shows the urgent need for a greater organised cooperation and solidarity between the employees of all segments of aviation sector - the airlines and airports, to resist the onslaught of the employers and the government, in the days to come.

Another question needs to be addressed. The manner in which Jet Airways resorted to mass scale retrenchment and simultaneously raised a hue and cry about crisis and the loss it has been facing, thereby pleading for a bail out package and almost the same language being echoed by the Civil Aviation minister, throws up a crucial question: Why should the public exchequer be burdened to bail out a private corporate from the consequences of a situation which is of its own creation? The government does not have any say in the business decision of private corporates. When such business decisions bring profit, everything goes to the owner. When they result in losses, why should the public exchequer shoulder that burden? Secondly, has the Civil Aviation minister verified what are the components of loss being suffered by Jet Airways – how much is from airlines operations and how much from others, including the stock market. The policy of bailing out speculators with funds from public exchequers has been adopted by the US administration. Is the government here following in the footsteps of the USA even in this regard?

When the public sector companies face a loss, they are termed inefficient. When the private corporates of the minister’s choice face a loss, then it is conceived as the result of crisis and a bail out is being pleaded for. Novel indeed!

The last point is about the tax on aviation fuel. The excise duty on fuel for public transport, i.e., diesel is around Rs 7 while on petrol it is Rs 15 per litre. The excise duty on aviation fuel is only Rs 2.87, i.e., less than half of the duty on diesel and less than one fifth of that on petrol. Still the airlines are crying foul. The real game is to allow privatisation of profit and nationalisation of losses for the private corporates in the name of so called “bail out”! When there is profit, private corporates will own the same, when there are losses, the burden will be passed on to the workers through lay-off and retrenchment and also to the public exchequer through so called bail-out package and concessions. This is the real and ugly face of neoliberalism.

The excise duty on fuel for public transport, i.e., diesel is around Rs 7 while on petrol it is Rs 15 per litre. The excise duty on aviation fuel is only Rs 2.87, i.e., less than half of the duty on diesel and less than one fifth of that on petrol. Still the airlines are crying foul.