Domestic airlines poach expats from foreign rivals

Hiring expatriates as pilots or CEOs has now become passé for domestic carriers.

With carriers such as Jet Airways and Kingfisher Airlines all set to battle it out on international routes, leading expatriates with years of experience in global airlines are now being wooed for top management posts.

Jet Airways, the private airline with clearance for flying abroad, has roped in 14 expatriates from major foreign carriers.

The company was able to woo five senior management executives from Singapore Airlines - one of their key competitors, especially in the south-east Asian market.

Besides, three executives have left Gulf Air, a region that has recently been opened up for Indian private carriers, for the company. Jet started operations to West Asia in January this year. 

Kingfisher boasts of five expatriates on its advisory board, out of which two are from Cathay Pacific and one from KLM Royal Dutch Airline.

Indian carriers usually have to offer executives a hike of 30-40 per cent on the previously drawn salary.

"For instance, a vice-president-level executive at a full-service carrier would get close to Rs 10 lakh a month, which would surely be a 40 per cent hike from the previous employer," said an industry expert.

Airlines such as Jet Airways point out that beefing up their international operations is the primary reason for the induction of such a large number of expats.

"An executive with experience in an international airline would be of tremendous use to us for the management of our international operations," said an executive with Jet Airways.

For instance, as a replacement for V Raja, the ex-V-P for overseas operations, who quit last year, Jet appointed Gerry Oh in July 2007. Oh has 25 years of experience with Singapore Airlines.

Last year, Jet lost six members from its management team, out of whom four went to rival carrier Kingfisher.

A lack of trained personnel in engineering and operations has also forced airlines to appoint expats as operational heads, albeit at a premium.

"In some areas, such as engineering and maintenance, the industry still has a scarcity, which will only be balanced in the next two years. Till then, airlines will have to get expats to head these operations," said Surajeet Banerjee, vice-president, HR, Spicejet.

Carriers such as SpiceJet, Simplifly Deccan and IndiGO have expats heading their engineering and technical departments.

Airline executives, however, say that expat salaries are not a major burden to carriers' payroll costs.

"Top-line management salaries only account for 5 per cent of our payroll costs. So the hike in salary makes a minuscule difference. The difference, however, comes from the salaries of pilots, who account for more than 40 per cent of our payroll costs," said K G Vishwanath, general manager, MIS and investor relations, Jet Airways.

For the calendar year 2007, Jet's expenditure on salaries and wages jumped 28 per cent compared with the year before on account of a high intake of expats.