Jet Airways, which has been struggling on the back of rising fuel prices and increasing competition, is looking at various cost-cutting measures to keep its operations afloat.
As part of its cost-cutting measures, the airline has reportedly asked some of its employees, especially the ones in higher positions to consider a pay cut of up to 25%.
In a statement put out by the company, it said that for desired business efficiencies and to realise higher revenues, it has been implementing several measures to cut costs that include sales and distribution, payroll and maintenance, among others.
It is said to have been meeting employees and pilots over the last two days to negotiate terms. Jet Airways has 16,000 employees and 2,000 pilots.
The airlines has been badly hit due to rising fuel prices, a falling market share amidst intense competition and not having expanded in the last six years. According to a Mint report, Jet fuel price surged 44%, to Rs 69,090 a kilolitre in Delhi on 1 August from Rs 8,110 last year.
Jet Airways registered a loss of Rs 636.45 crore in FY18, while its rivals such as SpiceJet and IndiGo have been doing well, reporting profits.
Economic Times reported on Friday that the company communicated to its employees that it doesnâ€™t have enough funds to operate beyond 60 days.
However, a member of National Aviation Guild (NAV), a union of Jet Airways pilots, says that no such communication was made to them.
â€śThe management had a meeting with all available pilots in Mumbai and Delhi, where they spoke about restricting the company financially and to streamline operations. That was all that was discussed. The pilot body, which been talking to the management, will be called for another meeting soon. But before that, we will have meeting and discuss with members and then talk to the management on whatâ€™s the best way forward,â€ť Capt. Parikshit Joshi, a member of NAV, told The News Minute.
Of the 2,000 pilots who work with Jet Airways, 1,135 of them are part of NAV.
Capt. Parikshit said that after discussing with its members, the pilot body will make suggestions that are in favour of the sustainability of the model that Jet Airways operates on, adding that these will be dynamic suggestions as many factors will have to be taken into consideration.
Speaking of pay cuts, while he did not comment on any specific number suggested by the management of the airline, Capt. Parikshit recognized that if there is a restructuring of operations, remuneration restructuring will have to happen as well.
â€śBut the details not yet discussed because pilots not given their opinion yet to the guild and the guild canâ€™t take any decision on their behalf and the management in turn cannot take a decision,â€ť he added.
Jet Airways, in its statement, said that the airline management is in dialogue with stakeholders to enlist their full support and cooperation for realising necessary savings across all parts of the business.
â€śThe airline is committed to create a growth-oriented, sustainable future, and a revitalized guest experience armed with the addition of 225 B737 MAX fuel-efficient aircraft which will be inducted in its fleet over the next decade, and of which, 11 are slated to join within this financial year. The airline refutes and strongly condemns the speculative comments of/from certain vested interests, who are making deliberate attempts to undermine Jet Airwaysâ€™ transformation efforts,â€ť it added.
Currently, Etihad Airways owns 24% stake in the airline, while its founder Naresh Goyal holds 51%. Naresh is now reportedly looking to raise funds on an immediate basis, which may include him offloading part of his stake.