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Jet Airways fires 15 top level executives, grounds 8 planes this month alone

Jet Airways said that external factors such as crude price, rupee devaluation and pricing environment necessitate change in the airline's operations.

twitter-logo BusinessToday.In   New Delhi     Last Updated: October 22, 2018  | 14:24 IST
Jet Airways fires 15 top level executives, grounds 8 planes this month alone

As it battles financial crisis, Jet Airways has decided to trim its workforce and operations further. Jet Airways asked 15 managerial level employees from departments such as engineering, security and sales to leave in October. A Jet Airways official said that there was a lull in September but the pink slips have begun again, as mentioned in a report in The Economic Times.  Additionally, the airline has also grounded eight of its planes at the Chennai and Mumbai airports.

The official said that engines have been dismounted from these planes. It essentially means that these planes may remain grounded for six months or more. There have also been speculations that Jet is struggling to meet lease payment obligations. The affected planes include an Airbus A330, a Boeing 777, two Boeing 737s and three ATR turboprops.

The airline, however, told the daily that it regularly evaluated fleet requirements. Jet Airways said that they regularly review its network to address its capacity exposure to routes, markets and airports. It did not comment on the workforce pruning. Jet Airways said that external factors such as crude price, rupee devaluation and pricing environment necessitate change in the airline's operations. It said that they are also rightsizing the ATR network to align capacity and demand.

According to the daily, 8 to 10 planes undergo regular maintenance every day, which means that at any given point, 16 planes are out of service, adding that it may increase to more than 20. Currently Jet Airways has 124 planes, as mentioned on its website.

Jet has also replaced its wide-body aircraft on certain domestic routes as well as international short-haul routes with its narrowbody fleet that includes the fuel-efficient B737 MAX aircraft.

Jet Airways' salary expenses rose by 53 per cent in the past five years surpassing plane lease payments as its second-biggest expense. Fuel still accounts for the airline's biggest expense.

The daily mentions that when CEO Vinay Dube joined a year ago, he was handed a list of 100 senior to mid-level executives, managerial level and above who are needed to be given "gracious exits". Forty such employees had left till August. In August, Jet's senior management was asked to take a 25 per cent pay cut. Pilots and technicians were asked to take similar pay cuts but they refused. 

Credit rating agency, ICRA had also downgraded Jet Airways' long-term borrowing programme. The airline is also facing investigations by Ministry of Corporate Affairs over complaints of irregular transactions.

(Edited by Anwesha Madhukalya)

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