Jet debt concerns: Airline asks junior pilots to take 30% cut or leave

Out of Jet's total debt of around Rs 9,000 cr, Rs 2,800 cr is related to aircraft acquisition

Jet Airways has asked its junior pilots to take 30 per cent salary cut or leave the organisation in a cost-saving exercise.

Jet, which is facing pressure on profitability, is implementing a new work pattern for 150 juniormost pilots who joined the airline last July. Under this, the pilots will be offered 10 days’ leave and will be paid for 20 days only in a month. This will be implemented on an interim basis from August 1, the airline informed its pilots.

The airline has 1,700 pilots. “Certain developments in the market, including that of the Gulf region, and our continued efforts to boost internal efficiencies, have resulted in the review of our network, fleet and crew use. Consequently, as a proactive step, the company has made interim alignments to its crew work patterns, which will be reviewed in the future, in line with network growth,” Jet Airways said.

Senior Jet pilots get 22 days’ work and eight days off but are paid for the full month. The pilots are paid for 75 hours minimum each month and get paid extra if they exceed both 22 days and 75 hours.

An airline source said all other pilots were offered 20 days’ work and 10 days’ off, and 15 days’ work and 15 days’ off patterns (called lifestyle patterns) on an optional basis, but very few went for it, as it spelt a loss of salary. However, the 150 pilots mentioned earlier have not been given that option and the pattern for them is compulsory.

The salary cut for pilots is its latest measure to trim costs. Demand weakness from the Gulf region and yield pressure in domestic market are hurting the airline. Earlier this year, the airline introduced a variable pay scheme for its senior management and imposed a freeze on salaries for its staff.

Jet made a consolidated profit of Rs 438 crore for FY17 but this was due to non-operational items like gains from lease-back of planes and from land development. The airline has around Rs 9,000 crore debt, of which Rs 2,800 crore is related to aircraft acquisition. Around $200 million (Rs 1,300 crore) of debt is due for repayment in the 2017-18 and the airline hopes to use internal accruals for repayment. Its interest spending in FY17 was around Rs 850 crore.