Jet Airways asks staff to take pay cut up to 25%: Here's why

Jet Airways has reportedly asked its staff to take a pay cut of up to 25 per cent. According to a report in the Economic Times,  Jet Airways currently is under pressure from rising crude price and a depreciating rupee. The airline has decided to reduced staff salries starting from August itself, the report further stated. 

Employees who earn up to Rs 12 lakh annually will get a pay cut of five per cent; and it is 25 per cent for staffers who earn up to Rs 1 crore and above, according to the publication. 

Cited sources the report stated that there is no timeline as to how long this wage cut will continue. Besides, there’s no clarity at present on whether there will be a refund of deducted salary at a later stage. 

Jet Airways' top management held meeting with staff informing them about the salary reduction, and talks with employees are expected to continue on the issue, the report highlighted.

The report also stated that Jet Airways might also cut down the pay of its pilots by as much as 17 per cent. Jet Airways has an annual salary bill of about Rs 3,000 crore, and the move is likely to cut it by about Rs 500 crore.

“If the cut is implemented, we might leave the airline and join the competition at better remunerations,” a pilot on the condition of anonymity told the ET.

Last month, Jet Airways announced signing a formal agreement with aircraft manufacturing giant Boeing to acquire an additional 75 single-aisle 737 Max aircraft valued at $8.8 billion (Rs 60,244 crore) at current list prices.

With this, the airline will now acquire a total of 225 Boeing 737 Max planes over a period of time as it eyes expansion in the fast-growing domestic aviation market. In 2015, the airline had ordered 75 such planes. Earlier this year, it decided to buy 75 more aircraft of the same model.

The company had received delivery of its first 737 Max last month and at present, it has two such planes. It plans to induct a total of eleven 737 Max planes in the fleet by March next year. Jet Airways has around 120 aircraft in its fleet to serve over 60 destinations in 15 countries across Asia, Europe and North America.

Naresh Goyal, chairman of Jet Airways, said, "Our latest order for 75 additional Boeing 737 MAX aircraft reflects our long-standing association with Boeing and reposes our faith in the aircraft they manufacture." The signing of the agreement happened at the ongoing Farnborough International air show in the UK.

Ajay Singh-promoted low-cost carrier SpiceJet is also said to be in talks with the aircraft manufacturers to purchase planes that would help its ambitions to fly long-haul.