Cash-strapped airline Jet Airways has brought in global management consulting firm McKinsey & Co to formulate a turnaround strategy as it struggles to stay afloat, a senior airline official confirmed to The Economic Times.
McKinsey is helping the beleaguered airline in cost-cutting measures across its functions, while the Boston Consulting Group is helping with revenue enhancement.
The Naresh Goyal-led airline is grappling with operational and financial issues, for which these two global consultants are brought in. The airline delayed salaries of its employees, grounded at least eight planes of its fleet, let go some senior management and is under the scanner of lenders for possible defaults.
"Jet Airways is already engaged in implementing the various elements of its turnaround strategy. Such initiatives typically require inputs from external advisors/ specialised consultants. While the airline will make due announcements at the appropriate time, it is unable to comment on specific queries due to reasons of confidentiality," an airline spokesperson said.
This is not a first for the airline. Jet Airways worked with management consultant Alvarez and Marshal for 15 months until 2015. When Etihad Airways bought a 24 percent stake in the airline in 2013, Seabury Group had come on board. In both the cases, Jet Airways was in an unstable financial condition facing debt.
Jet Airways availed services of four small firms last year, including the National Institute of Industrial Engineering, to make its engineering department more efficient, a source told the paper.
An industry executive said that many suggestions that these management consultants gave regarding rationalising manpower and managing operations were not implemented by the airline.
Jet Airways has divided salaries into two equal tranches for the past few months, although it has been unable to pay even that on time. Senior management of the airline had to take salary cuts of 25 percent, while pilots and technicians refused the same.
Jet Airways’ long-term programme has already been downgraded by credit rating agency ICRA. The airline has approached many of its peers for cash and is in discussion with investors to sell a stake in Jet Privilege.