MUMBAI: Jet Airways is planning major cost cutting operations due to insufficient operation cash. It’s learnt that the airline has communicated to its employees that it cannot fly beyond 60 days due to the funds crunch, asking them to expect a drastic cut in their salaries. Some employees having been asked to take as much as 25 per cent cut in salaries. The communication has triggered protest.
According to a report, the company is planning a pay cut of 5 percent for those who earn up to Rs 1 lakh a month and 25 per cent for the creamy layer who draw Rs 1 crore and more annually
Shares of the company fell more than 5 per cent in early trade in Mumbai.
"In line with its stated focus of creating a healthier and a more resilient business, Jet Airways has been implementing several measures to help it reduce cost as well as realise higher revenues, for desired business efficiencies," the company management said as per the report of a business daily.
“We have been informed that the airline cannot run beyond two months and the management needs to cut cost through pay cuts and other means to ensure that it stays afloat beyond that. The airline did not inform us about all this all these years which has dented trust of employees in the management,” an employee of the airways said.
The airline is facing several challenges including a surge in fuel prices, weaker rupee and intensifying competition. Jet Airways has reportedly approached investment bankers again to help sell a stake in the carrier.
News of the funding crunch at India’s oldest private sector airline comes amid reports that it is set to induct 11 Boeing 737 MAX fuel-efficient aircraft to its fleet within this financial year, with a total of 225 planes to be inducted over the next decade. The carrier is expected to announce a Rs 1,000 crore loss in the first quarter of this fiscal having already suffered a loss of Rs 767 crore during FY18.