Jet bosses to take salary cuts to keep flying

New Delhi: Jet Airways, the country’s Number I private airline, has asked its top management to take a 25 per cent cut in salaries and help the company tide over a decline in business.

Sources in the company told CNN-IBN the top management would take a 25 per cent cut in salary. The company’s management has proposed a 10 per cent cut in the salaries of pilots and engineers.

Employees earning up to Rs 5 lakh a month will face a deduction of 5 per cent. Employees earning more than Rs 5 lakh will face a deduction of 10 per cent. The pay cut would not affect employees earning less than Rs 75,000 per month.

A five-member member team led by company chairperson Naresh Goyal has been set up to explore cost-cutting measures. As part of such measures, the company will lease out nine aircraft, reduce hotel and entertainment allowances and scrap training allowance for pilots.

Jet pilots are reportedly opposed to the proposal and have argued that there are other areas in which the airline can cut costs. Goyal met with his pilots on Sunday and is scheduled to meet with flight engineers.

CNN-IBN’s aviation correspondent reports Jet’s top management wants to set an example by taking salary cuts. Goyal has said it is difficult to contain costs and salary cuts is one of the few options the airline has to do it.

In October, the airline sacked 1,900 employees but was forced to take them back because of a national uproar.

Industry in trouble

The Indian aviation industry is in a financial crisis because of falling passenger traffic, high fuel cost and a weak rupee. The combined loss of the Indian aviation industry is currently estimated to be Rs 4,000 crore and it may increase to Rs 10,000 crore this financial year.

The number of weekly flights has declined from 10,922 in March to 9,635 in November. PTI reports all airlines together owe oil companies Rs 3,000 crore and the Airports Authority of India Rs 1,100 crore.

Civil Aviation Minister Praful Patel on Saturday asked the country’s airlines cut to fares as jet fuel prices have eased, but Kingfisher Airlines owner Vijay Mallya said that would be difficult.

Mallya said the strengthening dollar is hurting airlines. "A huge component of our costs is lease cost for aeroplanes and maintenance. All are dollar denominated," said Mallya.