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Jet Airways, Pilots Face-Off Over Pay Cut Issue

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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.
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.

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