MUMBAI: When Naresh Goyal, head honcho of Jet Airways, retracted the sacking of nearly 1,900 staff last month, he had said that the employees will have to take a reduced pay package if the airline has to remain afloat.
Faced with mounting losses, Jet on Sunday proposed a major cut in wages for all employees across the board, from the top management to the ground staff, as a measure to cut costs.
According to sources, the management has proposed that while the senior management team led by the chief executive officer will take a cut of about 25 percent in their wages, the lowest rung of employees including the in-flight and ground staff will have to do with a 15 percent cut. Apart from the wage cut, the company is also likely to announce a voluntary retirement scheme (VRS) for deserving employees.
While senior officials of the company refused to comment on the news, a manager said that this was being discussed since the past few days.
“There is nothing new about his proposal and the management had made it clear last month that to tide against these bad times we will have to take a cut in wages,” he said.
Sources said that either Goyal or the CEO of the company will address different categories of staff either on Monday or Tuesday and explain the rationale behind the proposal of wage cut.
Apart from the cut in wages, the management has also suggested that the number of expatriate pilots be reduced since they are more expensive than the Indian nationals.
“Out of nearly 1,100 pilots in Jet almost 30 percent of them are expatriates, and they come at a very high cost, and retiring them will be a huge saving to Jet,” sources added.
Rising fuel costs, weakening rupee and falling passenger traffic have taken a huge toll on the Indian aviation industry and the combined loss of the industry is expected to increase to Rs 10,000 crore this financial year.
Jet Airways has been also posting constant losses for the last few quarters and for the first half of the current year it has posted a loss of Rs 746 crore which is a huge dent in its balance sheet.