Highlights
- Jet Airways has said that it will reduce salaries for various staff and send many employees on leave without pay.
- The pay cut would be up to 50 per cent and the quantum would be higher for the CEO and CFO.
- The development came shortly after its new owners, the Jalan-Kalrock Consortium (JKC), said it might take “difficult” near-term decisions to manage cashflows.
Jet Airways, once India’s largest air carrier, which was grounded in 2019 due to financial troubles, is aiming to do something that no bankrupt airlines in the country have done so far – to fly again.
Jet Airways 2.0, as the company likes to call it, had planned to take to the skies again in October this year under new management.
But that did not happen and there is more worrying news.
Salary cut for Jet Airways staff
Jet Airways has said that it will reduce salaries for various staff and send many employees on leave without pay.
Jet Airways has around 250 staff.
The pay cut would be up to 50 per cent and the quantum would be higher for the CEO and CFO. The temporary pay cuts and Leave Without Pay (LWP) for the affected staff would be effective from December 1.
No staff let go: CEO
“To set the record straight (as many numbers and %s flying about): 1. Two-thirds of staff not impacted at all 2. Of the remaining one-third, most will be on temp pay reduction. 3. Only a small portion of the total (~10%) will be on temp LWP. 4. No staff let go,” Jet Airways CEO Sanjiv Kapoor said on Twitter.
How the troubles started
The development came shortly after its new owners, the Jalan-Kalrock Consortium (JKC), said it might take “difficult” near-term decisions to manage cashflows.
Recently Kalrock Capital’s promoter Florian Fritsch had also come under the lens of regulatory agencies in Liechtenstein, Switzerland, and Austria.
Besides last month, the National Company Law Appellate Tribunal (NCLAT) directed the consortium to pay the unpaid provident fund and gratuity dues of the carrier’s employees.
“… while we await the handover of the company as per the NCLT process, the longer-than-expected time being taken for the same may result in some difficult but necessary near-term decisions to manage our cashflows to secure the future while the airline is still not in our possession,” the JKC said in a statement.
The rise and fall of Jet Airways
Founded by aviation veteran Naresh Goyal in 1993, Jet Airways was at one point the largest airline in India, with a 21.2% passenger market share and operated over 300 flights daily to 74 destinations worldwide.
But like most airlines in India, Jet Airways also ran into financial troubles, from which it never recovered.
On 17 April 2019, Jet Airways grounded its fleet and filed for bankruptcy.
The new owners received the Air Operators Certificate from the Directorate General of Civil Aviation (DGCA) in May this year and, despite the troubles, are still confident about flying soon.
