Financially strapped Jet Airways has decided to lay off over 800 of its employees on Wednesday.
The move comes a day after the Naresh Goyal-promoted airline struck a strategic alliance with Kingfisher Airlines to reduce costs and improve operational efficiencies.
Under the agreement, the two companies will cross-utilise crew on similar aircraft types, cross-sell flights through the global ticketing system and also have common ground-handling services.
The airline will lay off only the employees who have not been confirmed and will cut across departments — cabin crew, pilots, ground staff, airport services and management. Most of these employees have been in the company for less than six months.
Confirming the development, a senior executive of Jet Airways said: “If both airlines are going in for common route rationalisation, common crew utilisation and common crew-sharing on similar aircraft types, the flab has to be cut.”
He added: “We have pulled out from the US route and are also going to rationalise our expansion and it is essential that we offer an exit route to recently recruited staff.”
Phone calls and SMSes to Jet CEO Wolfgang Proc-Schauer went unanswered.
Jet Airways and Jetlite (formerly Air Sahara, which Jet acquired last year) has 12,000 employees and the new cut will eliminate at least seven per cent of the airline’s staff strength.
This is the third time that the carrier is trimming its workforce. In 2007, the carrier cut staff by1,200 after it took over Air Sahara. In August this year, JetLite offered over 700 employees a voluntary separation scheme. This is the first time that the axe is falling on Jet Airways employees directly.
Industry experts said this move was expected since Kingfisher had a far better employee-to-aircraft ratio — 20:1 against Jet’s 85:1, according to a Kingfisher executive requesting anonymity.
Industry estimates said the alliance would help the two carriers save Rs 2,000 crore to Rs 4,000 crore a year, especially through fuel and route rationalisation.
“If the combine has an almost 60 per cent market share of 40 million passengers, even an increase in yield by Rs 1,000, which will take place due to the consolidation will increase their revenues by Rs 2,400 crore a year,” said an aviation analyst.
