Jet Airways drops plan to cut staff salaries up to 25%

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New Delhi: Full-service carrier Jet Airways has dropped proposed controversial plan to slash up to 25 per cent salaries of its non-management staff after protests from employees. Jet promoter-chairman Naresh Goyal told this to a section of the employees who met him on Friday, reported the Economic Times. The private carrier also credited staff salaries for July on Friday.

It may be noted that the private carrier is under pressure from elevated crude price and a weakening rupee. The publication quoted a Jet executive as saying that the pay cuts were earlier put on hold because the management had expected to persuade everyone to take a cut, but were released after the chairman’s assurance that there will be no reduction.

The daily highlighted that people who attended the meeting said the chairman sought support from the employees in salvaging the carrier’s image that has taken a hit after media reports on salary cuts. Goyal assured the employees that the country’s second-largest airline by market share is in a good position to encash on the growth that the Indian aviation market offers.

Last week, the company issued a statement saying that, "Jet Airways is committed to creating a competitive cost structure that ensures a sustainable future for the airline and its stakeholders. As part of its cost rationalisation measures, the airline continues to evaluate all initiatives to achieve greater business efficiencies. Payroll is one of the important components of the airline's cost structure and the senior leadership team has undertaken a reduction in their salary to lead by example." 

On Friday, the airline clarified that it was not facing any financial hardship and several reports were not just "factually incorrect, but also malicious." Worth mentioning here is Jet is not the only airline to be impacted by adverse industry circumstances. IndiGo's profit for the quarter to June 30 dipped 97 per cent to Rs 27.8 crore from Rs 811 crore a year earlier. The Naresh Goyal-promoted airline registered a loss of Rs 1,036 crore in the three months ended March 31, compared with a profit of Rs 602 crore a year earlier.

Jet Airways has struggled to keep a cap on costs in one of the world’s fastest-growing aviation markets where it is facing stiff competition from budget airlines such as IndiGo, GoAir and SpiceJet, opine experts.