The financial year 2017 was tough on Jet Airways and reeling under losses, the company has now decided to freeze salary hikes expected by employees at the end of April-March fiscal for at least a quarter, reports Economic Times.
According to a Business Standard report, the airline is also introducing a 15-20 percent variable pay component for its top management to save cost on wages.
Jet Airways, as compared to its peers, has higher cost structure and as part of a cost control exercise, it will include 100 senior officers under the variable pay scheme.
Vistara and SpiceJet are the other players in the aviation space that have adopted the variable pay structure.
The airline spent around Rs 2,316 crore in FY17 on salaries of 15,000 employees, out of which 2,000 are pilots that account for nearly half of the wage bill. In addition, employee cost was up by 26 percent on a year-on-year basis for the period.
Another cost that is adding to Jet’s expenses is its mixed fleet. It has both narrow body and wide body planes which results in higher cost. The airline’s per unit cost is more than that of IndiGo and SpiceJet.
The move by Jet Airways is not going down well with the pilots and they are also questioning the recent hike in salaries of engineers.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
