Jet Airways’ pilots upset over non-payment of salaries; threaten non-cooperation

The debt-ridden Airline is struggling to recover from a financial crisis.


Jet Airways, the Mumbai-based Indian international airline, has been riddled with problems for some time now. In fact, the challenges being faced by the carrier—in which Etihad, the UAE national carrier has 24 per cent stake— are reflective of the struggling Indian airlines industry.

The financial crisis looming over Jet Airways is because of rising fuel costs and the rapidly falling rupee value. In addition, many local airlines have been offering stiff competition.

All these factors put together have caused huge losses to the airlines—to the tune of Rs 1,036 crore in the first quarter and Rs 1300 crore in the quarter ending June this year.

It owes more than Rs 8600 crores to the banks, and has been delaying salary disbursements for two months in a row.

While Jet Airways is trying to raise funds to tide over the crisis, the growing discontentment among the staff is reaching alarming levels, with the pilots threatening non-cooperation. They are displeased with the way their salaries have been held back without any advance intimation.

The airline doles out Rs 3,000 crore every year, by way of salary disbursement. With the financial disaster, Jet had informed its employees last month that they will have to tolerate a salary cut to help tide over the crunch and operational expenses—5 per cent cut for employees drawing an annual salary of Rs 12 lakh, 17 per cent for pilots and 25 per cent for employees earning up to Rs 1 crore annually. This move had, however, been criticised and the suggestion was soon withdrawn.

But now, the salary delay is causing dissatisfaction. The disgruntled pilots have demanded that the airlines should stop the practice of recruiting expensive expats instead of domestic pilots. They also wish for the dissolution of all irrelevant posts, committees and groups created recently.

But despite having an improvement plan in place, banks are not too confident about lending to the company. With State Bank of India including Jet in the watch-list of stressed accounts, matters could not have been worse. However, despite all odds, the Company has managed to arrange $300 million in the form of advance lease incentives and borrowings from domestic banks. Therefore, drastic trimming of expenses is the only way out for Jet Airways to survive.

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