A section of pilots, engineers and senior management has said they are unwilling to accept a pay cut, a senior Jet Airways official said.

This executive, who did not want to be named as a decision has not been firmed up, said Indian pilots with the airline have instead suggested sacking foreign pilots who typically draw larger salaries. Foreign pilots comprise some 33% of Jet’s pilots and are often paid 50% more than their local counterparts. “Since pilots are not willing to accept suggested pay cuts, a section of engineers and senior management are (also) not willing to take pay cuts,” the executive added.

Representatives of Jet’s cabin crew have also approached the management asking that allowances shouldn’t be cut against a backdrop of the airline reducing its flights, said another executive who is familiar with the development. Cabin crew are paid allowances based on flying hours.

Ragini Chopra, a spokeswoman for Jet, said employees had volunteered to take a pay cut. “Over 50% of the employees have positively reacted to the proposal,” she claimed. “I cannot comment or disclose the details of this pay cut proposal since it is purely an internal matter.”
An email sent to Jet on Monday with additional questions went unanswered.

Naresh Goyal, founder-chairman of Jet, had said in a letter to employees earlier this month that the airline’s top management had already volunteered a 25% cut in salary. He also suggested a combination of wage and allowance cuts for pilots to bring their remuneration in line with other employees.
“It is up to (the) chairman to take (a) call on the suggested wage cuts as pilots are not co-operating to his request,” said another Jet Airways executive, who also did not want to be identified. “There is no point in wage cuts if pilots are not willing to do that. Because over 80% of the savings from this pay cut should come from pilots, who draw heavy salaries.”

Airlines have resorted to cost-cutting steps as they are expecting a combined loss of $2 billion
The Society for Welfare of Indian Pilots, an association of pilots with Jet, is in negotiations with the company management over the issue.

Mint could not ascertain the number of Jet employee strength who earn Rs75,000 a month. Jet’s total employees rose some19% to 13,163 in March from the year-ago period and total employee costs rose 28.5% to Rs1,205.2 crore, much of it because of expansion.

Vijay Nara, an aviation analyst at brokerage Centrum Broking Pvt. Ltd, had previously estimated Jet’s wages proposal would only result in 10% savings on total employee costs.

India’s airlines have resorted to a series of cost cutting measures as they are expecting a combined loss of $2 billion (Rs9,460 crore) in fiscal 2009 due to higher jet fuel costs and overcapacity.
Jet’s rival Kingfisher Airlines Ltd recently rationalised salaries of pilots by migrating to a remuneration structure linked to flying hours in a bid to cut costs.

“We have introduced productivity-linked remuneration in line with international practices,” said a senior Kingfisher Airlines executive who didn’t want to be named. “… Deccan Aviation (which it acquired) had this structure and we are putting Kingfisher Airlines’ pilots in that structure.”

The executive body of Jet Airways is getting ready to spar with its pilots who are refusing to accept pay cuts and are threatening legal action against the top private carrier.

Last month, Jet Airways, which reported 2Q (July-Sept) loss of Rs.384.50 crore due to decline in passenger traffic and high fuel costs, said all employees, including senior executives, pilots, engineers and commercial staff (including cabin crew) would take a pay cut beginning December.

According to a Jet source, the management proposed a three-tiered pay cut system under which those drawing Rs.5 lakh-plus salary accept a 20 percent cut, while those drawing Rs.2 lakh-plus salary accept a 10 percent cut.

“Those in the Rs.75,000 to Rs.2 lakh bracket would face a 5 percent cut. But the pay cut will not affect those drawing less than Rs.75,000,” the source said.

The carrier’s top executives have already agreed to take a voluntary pay cut of 25 percent December onwards, the source added.

The nation’s top carrier has also opted for “allowance rationalization,” effectively downgrading hotel accommodation and trimming down entertainment and meal allowances for its commercial staff. The company will not also pay overtime dues to its pilots from December.

Though engineers, cabin crew and ground staff have accepted the pay cut proposal, yet the pilots are in no mood to agree.

Under the new pay cut system, the salary of junior pilots will be cut by 10 percent and that of senior pilots by 20 percent.

However, the proposal has been rejected by Indian pilots who are demanding that the carrier should get rid of expatriate pilots first.

According to the Indian pilots, they draw at least 40 percent less salary than expatriate pilots despite having similar experience and qualification and the difference in pay structure has already resulted in dissension in the ranks.

The Indian pilots said the expatriate pilots also get better benefits, including more paid-holidays and allowances.

However, Jet authorities has dismissed the allegations as being untrue and said all the pilots are treated at par.

The authorities also added that it does not give any preferential treatment to expatriate pilots and, in fact, last month, had terminated the services of 35 expatriate pilots who flew Boeing 737-aircraft for the airline.

As on September 30, 2008, it employed a total of 288 expatriate pilots and 748 Indian pilots.

However, the Indian pilots are in no mood to reconcile and have threatened to take legal action against the carrier, saying the pay cut proposal goes against the terms and conditions laid down in their employment contract.

“Some of the cuts go against our employment contract. We are planning to serve a legal notice on the airline,” a senior Indian pilot said, on conditions of anonymity.

“The management has reduced our variables without taking us into confidence which is not acceptable,” he added.

“We are firm in our stand. We will not accept any pay cut, voluntary or otherwise, unless the management does away with expat pilots whose pay packets are much higher than ours,” another pilot said.

Most Indian pilots agree that they are willing to negotiate with the management on pay cut issue but the latter should agree to meet them “half way” and “must accede to our demands on the expat pilots issue.”

But jet authorities remain unfazed. “Let them (pilots) do what they want. The management has taken this step (pay cut) to keep the company out of red. Those who consider themselves to be part of the Jet family have agreed to the proposal. But those who are grumbling are free to leave,” a senior Jet executive said.

According to the executive, the demand of the Indian pilots is unreasonable and the carrier is in no mood to reduce the present number of its expatriate pilots.

The Jet executive said that in international route, expatriate pilots are not accommodated in classy hotels, since they have their home city “close to our hub.” However, when an Indian pilot flies to any international destination, we have to spend a huge amount on their accommodation and other allowances,” he said.

Hit by high jet fuel prices and decline in passenger traffic, Jet Airways has formed an alliance with rival Kingfisher Airlines in fields including fuel management, ground handling, sharing of technical resources and crew for training and cross-utilization on similar aircraft types, in its attempt to switch to leaner business model and cost-optimize its business operations.

Jet Airways has also stopped flights on loss-making routes, delayed taking delivery of new aircraft and has leased out some of its existing aircraft to other carriers.

According to government data, total passengers carried by domestic carriers in November fell 4.2 percent sequentially to 3 million passengers of which Jet Airways carried 19 percent.

“We are firm in our stand. We will not accept any pay cut, voluntary or otherwise, unless the management does away with expat pilots whose pay packets are much higher than ours,” a Jet Airways pilot told PTI here today.

“We (pilots) also wish that the company remains financially stable and are willing to negotiate with the management on salary cuts, but it (management) should also meet us half way. The management must accede to our demands on the expat pilots issue,” he said.

Jet Airways Chairman, Naresh Goyal, had recently requested the airline’s staff to take a voluntary pay-cut in view of the financial turbulence worldwide. He had also told the employees that the airline’s top management had already agreed to take a 25% cut in its salaries.

Subsequently, the airline fixed 10 December as the date by which the employees should respond to the management’s proposal.

“We have sought a meeting with the management on the issue as we have had no formal communication with the management ever since Goyal met us on 23 November,” the pilot said.
Alongside the pay-cut issue, the pilots also oppose what they termed as the “management’s unilateral decision” to lower their allowances.

“The management has reduced our variables without taking us into confidence which is not acceptable,” the pilot said.

According to a Jet Airways pilot, while earlier a flight captain was entitled to between Rs 3,500-4,000 per night as a domestic layover allowance and a co-pilot entitled to Rs 1,500 per night for the same, the same has been stopped with effect from this month.

As far as international layover allowances are concerned, the daily amount has been decreased to $140 per night for flight captains from $200. For co-pilots, the same has been brought down to $100. A layover allowance stands for the grant given to pilots and cabin crewmembers on a per day basis for overnight stays outside their home cities. For pilots, even their over-time allowances have been discontinued by the airline.

When contacted about the cuts in the allowances of pilots and cabin crew staff, a Jet airways spokesperson said that the allowances have been rationalised as per international standards. Also in the firing line are Jet’s cabin crewmembers — over 800 of who escaped from a lay-off move by the airline in September this year. A cabin crewmember with the airline confirmed the news about their allowances getting cut as well.

On Thursday, the airline employees received a salary cut email, effective from December 1. “The mail informed pilots about a 10% cut in their salary and allowances, including no monthly or annual overtime dues, reduction of per day allowance and meal allowance for outstation stays from $220 to $145,” said a senior pilot.

“Some of the cuts go against our employment contract. We are planning to serve a legal notice on the airline,” the pilot added. However, there were no protests from engineers and other staff.

The pilot’s protests may have seemed unjustified — given that the airline took these steps to keep its neck out of water — if it were not for its alleged partisan handling of the expatriate pilots issue. On many ocassions in the past, including the time when the airline chief Naresh Goyal called the pilots to discuss salary cuts last month, the said issue was brought up. The Indian pilots have been demanding a complete phase out of foreign pilots — they have to be paid double the salary as compared to their Indian counterparts — as the airline has surplus pilots on some aircraft like the B-737. Among other sore points are the alleged discrimination in flying hours alloted and destinations.

“Despite several assurances by management, the discrimination continues, even at the cost of losing more money. For instance, the airline is wet leasing B-777 aircraft to Turkish Airlines and Gulf Air. It has decided to send expatriate pilots with these aircraft, though they would cost the airline more. An expatriate pilot would have to be paid $20,000 whereas an Indian is paid only $12,000. We can’t accept the salary cuts in such a scenario,” the pilot said, adding that expatriate pilots’ salaries have not been touched. “The only change is that the airline won’t pay for hotel accomodation in the city that the expatriate pilot is based in. Instead, they will be paid Rs 1 lakh a month for accomodation,” he added.

The Jet Airways spokesperson said the measures were taken to overcome the challenges faced due to the current global economic slowdown. “Jet Airways has adjusted its route network and adopted internal measures to trim costs across the organisation,” the spokeserson said.
“All employees earning a gross salary of over Rs 75,000 per month have been requested for a graduated wage cut over the next 12 months. For pilots, this will be in the form of a combination of wage cut and allowance rationalisation, which will bring the contribution of pilots in line with the other employees in the company. The top management team has taken a voluntary cut of 25%, effective from December 8,” the spokesperson said, adding that the airline and its employees are united in their efforts.

Frequent fliers and tourists who want to fly Jet have been unable to buy tickets from the travel agents since Friday. According to aviation industry sources, more than 30 per cent passengers flying in and out of Calcutta travel by Jet and JetLite.

There are around 3,000 travel agents in India who are authorised to issue airline tickets. Around 200 are from Calcutta. A travel agent sells 25 to 50 Jet and JetLite tickets daily.

On Saturday, a crowd of passengers queued up at Jet’s city counter to buy tickets.

“When I called my agent yesterday, he said it would not be possible for him to book a Jet ticket,” said city-based businessman Kumar Aswani, who was scheduled to fly to Mumbai on Saturday evening for work. He had to defer his meetings in Mumbai to Monday and fly another airline.

Most of the passengers denied Jet tickets by travel agents said they would not book tickets on the airline’s website as they were uncomfortable about revealing their credit card details online.

“Buying Jet tickets has become very difficult now. I don’t want to book tickets online as there are instances of fraud. The only option is to go to the airport or the airline’s city counter and queue up,” said Manish Sharma, who often flies Jet.

V. Mahajan, another frequent flier, said he was forced to buy another airline’s ticket to Delhi despite having Jet coupons. “None of the travel agents was booking tickets against Jet coupons, so there was no other option. I might not be able to redeem the coupons before they expire.”

The problem started on November 1 when 16 airlines stopped paying commission to agents. “We are not issuing Jet and JetLite tickets as they enjoy the largest market share and initiated the withdrawal of commission,” said Anil Punjabi, the chairman (east) of the Travel Agents’ Federation of India.

“We are talking with the travel agents’ federations and expect the crisis to be resolved soon,” said a Jet official.

The incident took place on board the Jet Airways Aurangabad-Mumbai flight 9W-114 on Sunday. “There were about 40 to 50 passengers on board the Boeing 737 and everything was fine till this passenger asked the cabin crew her name when she was serving him,” said a passenger, requesting not to be named. “We heard him ask and found it strange since flight attendants have name tags on their uniform.”

The next question was: Are you Muslim? “She said yes, and this man, who was about 35 years old, started shouting at her,” he recalled. “The man said, `Why the bloody hell are you Muslims doing this to our country?”’

“We could see she was stunned, but she calmly replied, `Sir, this is my country too.’ He shot back, `I don’t think so, because people from your community are behind these attacks.’ She was on the verge of tears, but said bravely, `Sorry Sir, they don’t belong to India. They are not Indians.’ After that she quietly moved away, avoiding further conversation. We could see that she did not go towards the cockpit to complain to the commander about it. It was very embarrassing for the rest of us. We felt like apologising to her, but were too taken aback by the incident,” the passenger recounted.

The Jet Airways spokesperson was not available, despite repeated attempts. The airline industry in India, including Jet Airways, has a multicultural profile with cabin crew members drawn from various communities. “At a time like this, our employers should come forward and ensure us a safe and secure working environment. The attacks were very tragic and the deceased included people from many religions, including Muslims,” said a senior cabin crew member of Air India. “Insensitive passengers should be dealt with strictly. Airlines cannot leave their crew vulnerable to such attacks and should issue clear instructions on how to deal with such passengers.”

Ambarish K Diwanji, an Indian journalist, who was at the receiving end of similar prejudice after the 9/11 attacks in America, recounted his experience. “I don’t remember whether it was a Southwest or a Jetblue flight, but the route was NewYork-Las Vegas-San Franciso. It was December 2001, two months after the Twin Tower bombing. I reached the airport early, before the check-in counter opened, since I knew that being brown-skinned meant that the security check would take longer,” he said. Two men, a white and a black, were ahead of him in the queue. “The white guy made a crack, which I did not quite catch, and so did not react. But I knew it was something nasty because his black companion apologised for him. When my turn came, the lady at the check-in counter asked me about the white guy’s comments and apologised,” he said.

Dewanji says that a short while after he boarded, the commander made an announcement saying there would be a delay because a passenger had to be offloaded for being rude to a co-passenger. “I had no clue what was happening till I saw the same white man being offloaded. He was shouting angrily, saying why can’t an American speak freely in America,” said Diwanji. “I had not complained against him, but apparently the woman at the check-in counter had.”

India’s Jet Airways Chairman Naresh Goyal speaks during a news conference to announce a code sharing agreement with United Arab Emirates Etihad Airways in Mumbai June 10, 2008. India’s top private carrier Jet Airways said it will go ahead with a prop…

Last month, Jet reported September quarter loss of Rs.384.50 crore due to decline in passenger traffic and high fuel costs and had proposed that all employees, including senior executives, pilots, engineers and commercial staff (including cabin crew) take a pay cut.

According to a Jet source, the management proposed that those drawing Rs.5 lakh-plus salary accept a 20 percent cut, while those drawing Rs.2 lakh-plus salary accept a 10 percent cut.

“Those in the Rs.75,000 to Rs.2 lakh bracket could face a 5 percent cut. But the pay cut will not affect those drawing less than Rs.75,000,” the source said.

The top management of the company has already agreed to take a voluntary pay cut of 25 percent December onwards, the source added.

The nation’s top airlines has also opted for “allowance rationalization,” effectively downgrading hotel accommodation and trimming down entertainment allowance for its commercial staff. The company will not also pay for overtime to its pilots from next month.

The source said that Jet chairman Naresh Goyal had proposed that the salary of junior pilots be cut by 10 percent and that of senior pilots by 20 percent, a move that has been rejected by the pilots. However, the source said that if the stalemate continued, “the airline is prepared to tell the pilots to either take the salary cut offer or go.”

Hit by economic slowdown and slump in the aviation sector, Jet Airways had unsuccessfully tried to axe 1900 employees in October though its subsidiary, Jetlite had successfully reduced its staff by 1000.

In its attempt to switch to a leaner business model and cost-optimize its business operations, Jet Airways also formed an alliance with rival Kingfisher Airlines in several fields, including fuel management, ground handling, sharing of technical resources and crew for training and cross-utilization on similar aircraft types.

The private sector air carrier, which controls about 30 percent of the market share, has also suspended its expansion plans, stopped flights on loss-making routes, delayed taking delivery of new aircraft and leased out surplus ones, and gone slow on its hiring plans.

The move comes soon after the airline had to succumb to the political pressure to withdraw its retrenched cabin crew last month. Jet has been looking at cutting costs and right-sizing the organisation after it rationalised its fleet and cut routes, following the recent slowdown in the aviation industry.

Expatriate salaries are at least 40 per cent higher than those of their Indian counterparts as a thumb rule in the industry. There has been discontent among Jet’s Indian pilots after the airline reduced their salaries.

Jet confirmed that notices have been served on some of the expatriate pilots. “We have served notices on some of the expatriate pilots, who were on contract with the airline, as their contracts have ended,” said a Jet Airways’ spokeswoman. The pilots, whose service contracts have been terminated, are from the classic fleet – the Boeing 737 aircraft. The airline has grounded five of these aircraft.

Jet is also likely to do away with about 20 expatriate employees in the maintenance and engineering division.

Recently, Kingfisher Airlines, which had announced an alliance with Jet Airways to cut costs, too had reduced salaries of its pilots.

The exact reduction in the number of expatriate employees will be clear once the airline decides on the fate of its wide-body aircraft – the Boeing 777-300ER. Jet will be grounding or sub-leasing the wide-body aircraft (at least six of them after it stops the Mumbai-Shanghai-San Francisco flight in January). The number could be between 75 and 100 more pilots, depending on whether the airline goes for a wet sub-lease (where the cabin and cockpit crew is also a part of the lease agreement) or a dry lease. Jet is in the process of finalising a lease agreement for five of its Boeing 777s with a Turkish airline.

Jet has the highest number of expatriate pilots, around 240 of the total 1,000-strong pilots. It had hired them primarily for the ATRs and as commanders for its wide-body aircraft as it had planned aggressive international expansion earlier. The airline has often been under fire for hiring expatriates in key positions.

In any case, the current round of terminations may not be the end of the crew cutbacks at Jet Airways. The Times of India quoted an unnamed airline official who said, “The rumour doing the rounds here is that more cabin crew lay-offs are on their way. Even the people who de-rostered the crew today fear that they may soon be at the receiving end themselves.”

The current layoffs have come with little advance warning to the flight attendants. From The Times of India:
The retrenched crew are said to have taken it very hard, particularly since they were given a verbal job assurance as recently as two months ago by the top management. Chief commercial officer Sudhir Raghavan in one of his weekly Friday interactions with the cabin crew had said that their jobs were insulated. “Irrespective of whatever cost cuts we make, Mr Goyal has told me not to touch the cabin crew, he had said,” a crew member recalled Raghavan saying. “So no one pressed the panic button when Goyal and Mallya made the tie-up announcement,” he adds.
“It’s not just the junior staff, even experienced personnel like the crew and ground staff at Jet’s San Francisco base will be laid off once the airline calls off its flights in January,” the source said.

Jet Airways announced in a press release earlier this month that the Mumbai-Shanghai-San Francisco route will be discontinued effective January 13, 2009.

In a separate press release this week, Jet Airways announced an “alliance of wide-ranging proportions” with Kingfisher Airlines, intended to reduce costs and improve operational efficiencies.

When the plane reached a height of about 5,000 metres after taking off at 5.25 pm, the cabin crew in the rear of the plane informed the pilot that the rear door was not safely locked.

The commander of the plane immediately reported this to the Delhi air traffic control. The aircraft then flew up about 8,000 metres to burn fuel before making a safe landing an hour later.

The DGCA’s preliminary inquiry showed that the cabin crew had not shut the door properly, the official said.

Jet Airways executive director Saroj Datta said the doors have been made in such a manner that even if they were not aligned properly they would not open. He, however, did not comment on the suspensions.

The incident comes a day after an Air Mauritius plane with 241 passengers and 11 crew members on board had to abort take-off after fire was detected in the under-carriage of the aircraft at the Indira Gandhi International Airport, New Delhi.