Aviation crisis: Jet Airways to cut employees salaries by up to 25%
Indian aviation keep soaring high and then regresses into a tailspin in what seems like an instant. Even as demand is soaring in the country, costs are jumping out of control of airlines.
Indian aviation keep soaring high and then regresses into a tailspin in what seems like an instant. Even as demand is soaring in the country, costs are jumping out of control of airlines. The latest to feel the pinch is Jet Airways. As jet fuel price has gone up substantially, Jet Airways has asked its employees to take 25 percent cut in their salaries. The airline reportedly said that the cost of operations are rising on the back of rising crude and falling rupee.
Those who are earning Rs 12 lakh annually may well witness a pay cut of 5 percent, while for those earning Rs 1 crore and above have to take a 25 percent cut. According to an Economic Times report citing a source, the salary cut starts this month for employees and includes from managers to the CEO himself. However, There is no clarity on how long this cut in salary order will continue, it said.
The airline confirmed the news and said the senior management has already taken a pay cut. The airline management has held meetings with employees and informed them about the pay cut. The meetings with employees will continue on the issue, it said. Jet Airways in a statement said that the airline continues to evaluate all initiatives to achieve greater business efficiencies. "Payroll is one of the important components of cost structure and the senior leadership has undertaken a reduction in salary to lead by example,” the airline said.
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The pay cut for pilots will be in the range of about 17 percent, the report said. Its annual salary bill is about Rs 3,000 crore. The move is likely to bring the amount down by about Rs 500 crore. Situation may get worse in the second quarter, analysts say. The airline had reduced the pay and other benefits of 350 junior pilots by about 30 percent last year. After reporting profits for two consecutive years -- financial year 2016 and 2017 -- it posted losses of about Rs 76 crore during FY2018. The other airlines also have shown a similar trend.