Jet Airways cuts salaries by 20%

Monday, November 24, 2008 at 2:11 am under Business News

Facing the heat of economic slowdown, the Jet Airways management was on Sunday (November 23) understood to have suggested a five to ten per cent salary cut for its employees drawing monthly salary above Rs 75,000 and a voluntary retirement scheme for older staff.

A meeting of the management, presided by Jet Chairman Naresh Goyal at a five-star hotel in Mumbai, has decided to have a graded salary structure for all employees but kept a threshold for it saying those drawing Rs 75,000 per month would not face any cut in their salary, sources said.

The graded structure would be applicable to those getting above Rs 75,000 per month, they said. The management is also understood to have set up a committee to study the graded structure. However, the management was unable to convince its domestic pilots to accept salary cuts ranging from 10 to 20 per cent, sources said.

The airlines management is understood to have suggested a ten per cent slash in pay packets of junior pilots and a 20 per cent cut for senior pilots. But the pilots suggested that Airlines should do away with the expatriate pilots as they were a “huge burden” on the airlines because of their high salary packages,” a source close to the development said. The airlines have currently 1,000 pilots with 200 foreign pilots.

However, the management was unable to convince its domestic pilots to accept salary cuts ranging from 10 to 20%, sources said. The airlines management is understood to have suggested a ten per cent slash in pay packets of junior pilots and a 20 per cent cut for senior pilots. But the pilots suggested that airlines should do away with the expatriate pilots as they were a “huge burden” on the airlines because of their high salary packages,” a source close to the development said.

A proposal was also mooted to provide Voluntary Retirement Service (VRS) to some of the older employees to cut cost, the source said. “However, Goyal did not accept the proposal, saying the Airlines did not have money to offer such a package,” the source said.

The airline employs around 13,200 personnel with around 2,000 of them drawing a salary of more than Rs 1 lakh a month. These officials comprise mainly pilots and maintenance engineers. The air-carrier’s move to slash salaries comes in the wake of steep losses and rising operation costs coupled with falling passenger traffic.

Jet Airways posted losses to the tune of Rs 384 crore in Q2 of the current financial year. In October, the airline had announced a lay-off of 1,900 employees as part of its drive to prune costs but had to retract, following political pressure. Jet had, a few weeks back, terminated the services of 35 out of 240 expatriate pilots.

(With inputs from agencies)

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