The aviation industry has clocked a growth of 24 per cent in 2006 and is said to grow annually by 16 per cent. Ever since the domestic aviation industry began its rapid growth, spurred by the arrival of a clutch of new start-ups, industry players have grappled with the problem of staff shortage.

In an attempt to keep pace with the low-cost carrier model, the state-owned Indian has introduced a new voluntary retirement scheme for airhostesses above 40 years. Indian has 1,170 airhostesses drawing an annual salary of Rs 5 lakh each. Whereas at other domestic airlines the average age of airhostesses is 24 years and the salary ranges from Rs 28,000 to 38,000 per month. In 2004, a VRS scheme was introduced by Indian (then Indian Airlines) that was not well received. This time around it is offering a minimum of Rs 25 lakh and also a guaranteed employment for one member of the family.

Faced with sharp rise in pilot salaries over the past couple of years, airlines feel the demand-supply gap has led to a steep rise in pilots’ salary expectations. While pay packets differ with the airline and the experience of pilots, on an average, a captain can command a salary of Rs 4-4.5 lakh per month against Rs 3-3.5 lakh in 2005.

Faced with steep rise in pilot salaries over the past couple of years, airlines have asked the finance minister for income-tax sops for expat pilots working in the country. In a pre-budget note to FM, airlines have requested the government not to tax foreign pilots under Indian income-tax laws but treat them as scarce technical manpower. If accepted, this will help the domestic airlines to slash their wage bill for foreign pilots by around one-third.

Currently, over 550 expat pilots work in various domestic airlines in the country. As per industry estimates, the country requires over 3,000 pilots over the next three to five years. Given the scarcity of pilots in the country, the number of expat pilots is expected to swell in the coming months.

With airlines on a fleet expansion spree, the intake of expat pilots is likely to go up drastically. The country produces only around 200 pilots annually against a demand for around 500. Air Deccan, which alone has around 250 expat pilots and 200 foreign engineers, is likely to save around Rs 3 crore per month, if the exemption is granted. State carriers Air India and Indian too are ramping up their intake of foreign pilots in the coming months as they take delivery of new aircraft. Indian carriers are slated to add 400 more aircraft into their fleet over the next five years.