Jet Airways is instituting major cost cutting operations, including salary cuts, in its business due to lack of operating cash, Economic Times has reported.
The airline has reportedly communicated to its employees that it cannot fly beyond 60 days due to the funds crisis and that drastic measures are needed to bring down the costs of operations, with some employees having been asked to take as much as 25 per cent cut in salaries. The communication has been met with protests.
“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,” a Jet Airways employee told ET.
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.
Jet executives say that the cost cuts are in-line with its stated focus to make operations healthier and that the airlines has already begun to let off employees from its engineering department. Cabin crew and ground staff are also set to be trimmed as the exercise proceeds.
The airline has waived off its seven year bond periods for its first officers and the one year notice period for pilots as part of the measures.
Jet’s management has blamed rising fuel prices and major market gains by IndiGo for the crisis. 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.
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