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Jet Airways Imposes Salary Cut To Trim Losses

Posted in Airline News, Jet AirwaysNo comments

Beleaguered domestic air carrier Jet Airways said Tuesday it will go ahead with its proposed salary cut plan under which its top executives are set to see 25 percent drop in their pay cheque.

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.

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