Jet Airways says no salary hikes this year amid cost cuts
Jet Airways chief Naresh Goyal tells employees that salaries will not be hiked this year and cost cutting is likely to take centre-stage
New Delhi: Jet Airways Ltd chairman Naresh Goyal has told the airline employees that competition was increasing, air traffic was showing worrying decline and there were financial challenges ahead.
In a note to its employees on Friday to mark the airline’s 24th anniversary, Goyal said, “As we cross this 24th year milestone, it is necessary to reflect on the year gone by and take stock of the financial challenges ahead. With competition increasing, domestic capacity also rapidly increasing, traffic numbers are showing a worrying decline, making control over costs and revenue enhancement more than ever critical for the long-term viability of the aviation industry in general and our own airline in particular.”
The airline took off from Santa Cruz Domestic Airport at Mumbai on 5 May 1993.
IndiGo has cornered 40% of the domestic market share, while Jet Airways has just about 18% of market share. Internationally, Air India has expanded vigorously and is the single-largest Indian carrier in terms of international passengers carried. Tata Singapore Airlines’ Vistara is expected to launch international operations next year.
In the note, reviewed by Mint, Goyal told employees that salaries will not be hiked this year and cost cutting is likely to take centre-stage.
“I cannot emphasise enough the vital importance of cost reduction and I know I will have your fullest, most immediate and sustained attention to this crucial area of our business till desired cost reduction levels are attained. Our Finance team has been tasked with this mission and we have moved strongly in this direction by the unanimous support of our senior management team to forego for now annual increments, for which I am deeply grateful. But much more needs to be done with urgency, determination and strict financial discipline going forward, he said.
After hubs of Delhi Mumbai and Abu Dhabi, the airline is likely to focus on Amsterdam. Also, relationship with Jet’s shareholder Etihad continues to be fine, Goyal said.
“Despite the challenges, we are keeping pace with our momentum of the past, in harmony with our strategic partner Etihad Airways. Our joint expansion plans have been made operational and continue to unfold,” he said, adding, “With the Abu Dhabi gateway well-established among travellers, Amsterdam has become our gateway to Europe and across the Atlantic. Our commercial vision along with our strong code-share partnership with KLM, Delta, Air France and Virgin, have been the hallmark of the year gone by, enabling the expansion of our reach to Europe and the USA and delivering seamless connectivity between our domestic and international networks in India over Amsterdam, Paris and London to Europe and the USA.”
He said the next one year to the airline’s 25th anniversary will be tough.
“I have no doubt that long before our coming silver anniversary, with your sacrifices which belt-tightening measures would entail going forward and your exemplary dedication to your tasks on hand, we would soon be out of the woods. The road ahead is going to be hard, requiring tough decisions to cut costs at every opportunity and unrelenting efforts at revenue growth,” Goyal said.