Reuters reported that the company had urged pilots to take a 15% pay cut to save the company from running out of cash in 60 days.
Jet Airways was trying to lower costs in departments such as “sales and distribution, payroll, maintenance and other areas” and was also letting some employees go, according to the Reuters report that quoted an unnamed source. Others indicated the possibility of a change in ownership.
Reacting to media reports, CEO Vinay Dube called them “not only factually incorrect, but also malicious” and denied any plan to sell a stake in the company to anyone.
“In line with the Company’s stated focus of creating a healthier and more resilient business, it has been implementing several measures to reduce costs as well as realize higher revenues, for desired business efficiencies,” Dube said.
“Some of these areas amongst others include, sales and distribution, payroll, maintenance and fleet simplification.
“As part of these measures, the Company has been in dialogue with all its key stakeholders – internal and external. The dialogue with employees, has been to apprise them of the challenges being faced by the aviation sector in India and by the Company in particular, with an intent to enlist their full support and cooperation for realizing necessary savings across all business functions.”
Despite the high growth environment, the aviation industry is currently passing through a tough phase given a depreciating rupee and the mismatch between high fuel prices and low fares, he added.
Jet fuel prices have risen in line with crude oil prices, even as a lackluster economy and cut-throat competition from low-cost airlines limits Jet Airway’s ability to pass on increased costs to its customers.
“Indian aviation is experiencing strong growth and Jet Airways is well placed to be a part of this growth story. The company is committed to create a growth-oriented, sustainable future and a revitalized experience armed with the addition of 225 B737-MAX fuel efficient aircraft, which will be inducted in its fleet over the next decade, with 11 being inducted this fiscal. This envisioned growth will in fact, require additional human capital,” he said.
Dube said Jet Airways has been in existence for over 25 years and through the years has been successful in combating such business volatility.
“We are confident that the various transformation initiatives identified and under implementation by the Company will help in addressing the current issues faced by us and the industry. In fact, several transformation initiatives have already started to deliver positive results.”
He also reassured passengers that the airline is not cutting corners when it comes to safety.
“While continuing with cost saving and revenue enhancement measures to create a growth-oriented sustainable future, Jet Airways will continue to accord highest priority to safety and will ensure that safe operations continue to be resourced as required under regulatory compliances,” he added.