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Last Updated : Oct 22, 2018 09:04 PM IST | Source: Moneycontrol.com

Jet Airways to prune staff, operations to get out of financial trouble: Report

Jet has laid off at least 15 people at the manager or general manager level in sales, security and engineering departments in October.

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Troubled Jet Airways is reportedly laying off staff and cutting back its operations to further scale back its losses, according to a report in The Economic Times.

India’s second-biggest airline has laid off at least 15 people at the manager or general manager level in sales, security and engineering departments in October.

“A few of them were aged. There was a lull in September but now the pink slips have begun again,” a person in the know told the paper.

Eight of Jet Airways’ planes have been grounded in Chennai and Mumbai airports, including an Airbus A330, a Boeing 777, two Boeing 737s and three ATR turboprops. Engines of these planes have been dismounted, indicating that they may not function for another six months, according to the source cited earlier.

Without commenting on the workforce pruning, Jet told ET through an email that it continuously evaluates its fleet of 124 planes, adding that external factors like crude prices, rupee devaluation and pricing environment affect the airline’s network and scale of operations.

Apart from this, eight to 10 planes are sent for maintenance every day, which means that 16 planes are not functioning at any point.

The airline is hoping to get new Boeing 737 Max planes to make up for its reduced capacity. Out of its order of 225, the airline has received five of them. By the end of March 2019, it will get another six. “Due to current global factors, Jet Airways has deployed its narrowbody, fuel-efficient fleet on some domestic and international routes for commercial viability,” Jet said.

Salary expenses are Jet’s second-biggest expense after fuel, overtaking plane lease payments. When he joined a year CEO Vinay Dube was given a list of 100 senior or mid-level executives a year ago when he joined that needed to be let go. The senior management of the airline took a pay cut of 25 percent, and pilots were asked to take similar cuts.

These activities indicate the airline’s attempt to stay afloat, the report said, even if this means giving up its market share to competitors like IndiGo.

Credit rating agency ICRA downgraded Jet Airways' long-term borrowing programme and the airline is also under investigation by the Ministry of Corporate Affairs over complaints of irregular transactions.
First Published on Oct 22, 2018 10:37 am
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