Jet’s top brass eye 25% pay deferral; seek other savings

Jet’s top brass eye 25% pay deferral; seek other savings
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First Published: Fri, Oct 17 2008. 11 55 PM IST

On cloud nine: Reinstated Jet Airways employees celebrate in Mumbai on Friday. The job cuts had come on the heels of Jet striking a deal with rival Kingfisher Airlines for sharing resources and networ
On cloud nine: Reinstated Jet Airways employees celebrate in Mumbai on Friday. The job cuts had come on the heels of Jet striking a deal with rival Kingfisher Airlines for sharing resources and networ
Updated: Fri, Oct 17 2008. 11 55 PM IST
Mumbai: Jet Airways (India) Ltd’s senior management is considering up to 25% reduction or deferral in pay for a year, as the airline tries to ride out tough times even as it faced — and caved in to — political pressure over job cuts.
A senior Jet executive confirmed the development while not wanting to be identified.
On cloud nine: Reinstated Jet Airways employees celebrate in Mumbai on Friday. The job cuts had come on the heels of Jet striking a deal with rival Kingfisher Airlines for sharing resources and network. Indranil Mukherjee / AFP
Late Thursday night, Jet said it will no longer fire some 1,900 employees, many of them cabin staff, who were being asked to go because the airline, along with its Indian peers — has run into a perfect storm of rising fuel prices — an ill-timed international expansion and falling passenger traffic within India.
Jet Airways founder and chairman Naresh Goyal tried to repair the public relations damage stemming from two days of protests and political backlash over the job cuts by meeting some of the reinstated cabin crew at the Hilton Hotel in south Mumbai.
The staff were transported in some dozen buses from Jet’s headquarters.
The gesture as well as the decision to reverse course on layoffs appears to be working.
“It was a wonderful experience. We are very happy to be back in the company,” said Zuhaib Gul, after the meeting with Goyal. He has been with Jet for six months when he was let go on 15 October.
“It was like a father (Goyal) kicking his child (cabin crew) out of his house to take in his neighbour (Kingfisher Airlines Ltd owner Vijay Mallya),” said another cabin crew member who didn’t want his name used. “The suspension letter was a shock to us. Hope things will be alright now.”
Some other flight attendants told Mint that Goyal assured them there would be “no pay cuts” for the reinstated employees and that they could start work on Monday.
The job cuts had come on the heels of Jet striking a deal with rival Kingfisher to share resources and network. In announcing the reinstatement, Goyal insisted that he was only following his conscience and not any directives from politicians and ministers, many of whom openly said they would seek a reversal of the Jet decision. Several attempts to talk to Jet Airways chief executive officer Wolfgang Prock-Schauer were unsuccessful.
The rehiring adds to the economic stress that Jet, India’s largest carrier by passenger volume, is facing. Indeed, the airline has also started negotiations with vendors, including airplane lessors, parts and fuel suppliers to look for more ways to save costs.
“The airline has started re-negotiations with its vendors and has taken steps to reduce fixed costs,” said another Jet executive, adding that it plans to return some planes to lessors or to do a sale-and-lease-back arrangement to reduce losses. “We are also in talks with providers of engineering services, spare and other support measures to explore discounts or concessions.”
Jet Airways’ stock closed 6.3% lower at Rs243.85 a share on Friday.
Jet noted on 15 October that India’s aviation industry is expected to lose $2 billion in fiscal 2008-09. Jet has already pruned its long-haul expansion apart from offering 15% fewer total flights. Beginning April, Jet had started several routes, including to West Asia, Hong Kong, San Francisco, Toronto, Bangkok and New York.
The number of employees went up from 11,088 as on 31 March 2007 to 13,163 through March 2008. As a result, employee remuneration, increments and benefits for the same period also increased 28.5% from Rs938.1 crore to Rs1,205.2 crore
“Instead of sacking flight attendants of Jet Airways and its subsidiary JetLite Ltd, Goyal should have revisited the salaries of foreign national managers and celebrities in the company,” complained one middle-level manager with Jet who didn’t want to be named, claiming that the expenses of the company’s board, which includes actor Shah Rukh Khan and lyricist Javed Akhtar, comes to Rs25 crore annually. Mint couldn’t independently confirm this figure. Khan is also a recent pitchman for Jet’s international service ads.
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First Published: Fri, Oct 17 2008. 11 55 PM IST