Jet Airways trims workforce to cut costs

Airline denies sacking, says it is recruiting to meet its operational needs

Jet Airways, which posted a cumulative loss of about Rs 1,600 crore for the April-December period of 2013, is trimming its workforce to cut costs. While retired employees who had joined the airline on a contract basis have been asked to leave, the number of ground-handling staff, including loaders and drivers hired from agencies, is also being pruned.

As of March 2013, the company’s employee strength stood at about 12,000. On a standalone basis, the airline’s employee remuneration cost for the first nine months of 2013-14 was Rs 1,368 crore, 18 per cent higher than in the corresponding period of 2012-13. Employee costs had risen because of payment of increments and renegotiation of certain long-term wage contracts, the airline had told analysts in February. For the April-December 2013 period, Jet Airways’ overall expenses rose 10 per cent to about Rs 14,000 crore, compared to the year-ago period.

TACTICAL MOVE

• On a standalone basis, the airline’s employee remuneration cost for the first nine months of 2013-14 was Rs 1,368 crore, 18 per cent higher than in the corresponding period of 2012-13
• Employee costs had risen because of payment of increments and renegotiation of certain long-term wage contracts, the airline had told analysts in February

Sources say a couple of months ago, the airline management had held internal meetings; each department was asked to state its manpower requirement. A source said the move was aimed at lowering employee costs.

The airline has also reduced ground-handling staff, as it has reduced the number of domestic flights. Technically, these are not Jet Airways employees; the airline pays a fixed sum to the agency providing the ground-handling staff.

On Monday, a newspaper reported Jet Airways had sacked 40 employees from its human resources and cargo departments. The airline, however, denied this. “Jet Airways would like to categorically state the services of no employee at Delhi have been terminated. In fact, the airline continues to recruit in areas such as revenue management, cabin crew and pilots, based on its operational requirements,” Jet Airways said in a statement. It added it had decided to realign its domestic and international cargo-handling operations, under a single cargo handler (Jet Airways has selected Celebi, which also manages cargo operations for its partner Etihad). This will deliver significant efficiencies in cargo-handling operations and enable Jet Airways to redeploy its cargo manpower in other areas of operations,” the airline said. The airline did not specify whether any employee in its cargo department had been asked to take a transfer to Celebi, Jet’s ground-handler after the realignment of its cargo business.