DGCA probes AI Express crew strike that caused flight cancellations

There were a lot of cancellations due to the strike

Air India Express — Nestle, the world's biggest packaged food company, lowered its sales outlook on Thursday, noting it had to slow its pace of price hikes earlier than it would have liked as consumers have become increasingly cost-conscious. Its shares fell 4.3% in early trade. It now expects full-year organic sales to climb at least 3%, down from about 4% previously. First-half sales also came in slightly under analysts' expectations, increasing 2.1% compared with an average estimate of 2.5% growth in a company-provided consensus. "There is value-seeking behaviour among consumers. There is pressure, especially at the low-income range," CEO Mark Schneider said in a media call. He named North America, Europe and China as places where Nestle and some other consumer goods companies are observing this trend. The Swiss company increased its prices by 2%, less than the 3% expected by analysts and marking a continued slowdown in price hikes. Price hikes across the sector have moderated after years of spiking prices to preserve profits and absorb higher materials costs as companies prioritise regaining sales volumes lost to cheaper brands. The pricing miss is likely to make investors worry about 2025 margins and raises questions on "brand strength" for Nestle and the broader sector, Jefferies analyst David Hayes said in a note to clients. The maker of KitKat bars, Nespresso coffee, and Maggi seasoning managed to increase its volumes in the first half with real internal growth (RIG), a sales volume metric, up 0.1% compared with a consensus estimate that it would shrink 0.5%. "Across the spectrum of Nestle's categories, in terms of quality of category, pricing looks bad," Bernstein analyst Bruno Monteyne said in a note. "RIG matters, but at what cost?" he said. He added that the weakest price hikes were seen in coffee and pet food, which are typically Nestle's strongest sellers while commoditised categories, such as milk products and prepared dishes, saw price declines in the second quarter. Nestle's underlying trading operating profit was 7.8 billion Swiss francs ($8.8 billion), in line with a company-provided consensus. Photo: Reuters/Almaas Masood)

3 min read Last Updated : Jul 25 2024 | 1:11 PM IST

Aviation regulator DGCA is investigating the Air India Express cabin crew strike incident in May that had resulted in several flight cancellations and the airline will be penalised in case there were any non-compliance with regulations, Civil Aviation Minister K Rammohan Naidu said on Thursday.

In response to queries in the Lok Sabha related to flight cancellations, Naidu said the ministry was ensuring that there were no cancellations and delays as he emphasised that Civil Aviation Requirements (CARs) were in place to ensure that passengers received compensation.

"We acknowledge that there has been an issue with Air India Express There were some internal issues with the crew as Air India Express was merging with AirAsia India and a mass strike happened (on May 7)," the minister said during the Question Hour.

There were a lot of cancellations due to the strike.

"Once this issue started, the ministry got involved, DGCA (Directorate General of Civil Aviation) facilitated a lot of discussions with airline, crew members and everything, and it was sorted out ... There was also a software glitch that happened. Because of the software glitch, the crew member data that was supposed to be with the airline, there was some problem and manually they were trying to enter (data) ... For everything to get back to normalcy, (it took) some time," the minister said.

While noting that there are CARs in place, Naidu said if airlines do not follow regulations, the ministry gets involved and ensures that passengers get refund or readjustment in another flight.

Citing an example, he said a penalty of Rs 10 lakh was imposed on Air India for not following certain guidelines.

"The Air India Express strike incident also ... The DGCA is going into the depth and investigating the issue. If there seems to be any non-compliance from the airlines, then definitely we are going to penalise them and ensure that passenger is the top priority," Naidu said.

On May 7, around 200 cabin crew members of Tata Group-owned Air India Express went on strike to protest against alleged mismanagement at the airline, resulting in the cancellation of hundreds of flights.

Consequently, the airline management terminated the services of 25 cabin crew members and warned the others to join work or face the same action.

The strike was called off on May 9 after a conciliation meeting between representatives of a union representing the cabin crew members and the management convened by the Chief Labour Commissioner (Central). The termination letters were also later withdrawn.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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DGCA probes AI Express crew strike that caused flight cancellations

There were a lot of cancellations due to the strike