Jet Airways defers 25% of August salaries for pilots, engineers to October

Cash-strapped Jet Airways will pay only 75 per cent of August salary to its pilots, engineers and senior management this month. The airline has said it shall “make every effort” to release the remaining 25 per cent by October 9.

Earlier this month, the airline had announced that it will pay salaries to pilots, engineers, and senior management in two instalments. It paid 50 per cent of the sum on September 11 and the balance was to be credited on Wednesday.

However, Jet Airways has now announced that only 75 per cent of the August salary would be credited this month. 

Other employees have been paid the full August salary. 

“While we have remitted the first instalment, please note that we shall be remitting 50 per cent of the second instalment today and defer the remaining sum to a later date. The company is committed to honouring its obligations and shall make every effort to release the remainder by October 9,” the airline's chief people officer Rahul Taneja wrote in an email to staff.

Jet Airways had a wage bill of over Rs 31 billion in FY18. Pilots make up little more than 10 per cent of airline's 16,000 employee force but account for about half of its salary bill.

The airline's senior management has taken 5-25 per cent pay cut but similar action for pilots and engineers was put on hold because of protests. 

The airline posted Rs 13 billion first-quarter loss amid increasing costs and pressure on revenue. The airline is implementing a cash reduction plan and aims to save Rs 20 billion through various measures. It is also in discussions with private equity firms TPG Capital and Blackstone to sell its stake in loyalty programme.

The bids are likely to be between $350 million and $400 million, lower than what Jet expected, CNBC reported, adding that the airline expected to close the deal by the end of October.