Financially-stressed full service carrier Jet Airways deferred a part of the second instalment of the August salary to a section of its employees.
In a communication sent to the staff on September 26, Rahul Taneja, chief peoples officer at Jet, said, “While we have remitted the first instalment, please note that we shall be remitting 50% of the second instalment today and defer the remaining sum to a later date.” “The company is committed to honour its obligations and shall make every effort to release the remainder by October 9, the communication said.
The airline, currently facing its worst liquidity crisis, did not pay its pilots and aircraft maintenance engineers (AMEs) salaries for August.
Later, in September, these employees were paid half the salary with an assurance that the remaining amount will be paid towards September-end with the same to be followed for September and October salary payments.
When Jet had deferred salaries in August, it stated that it had not paid only 20% of its employees. Jet’s employee strength is 16,558 and by that logic, this section of the employees will be around 3,312, the number which will not get full salaries for the last month.
In a salary disbursal notification on September 6, Taneja had told Jet staff that disbursal of salaries for general mangers and above, cockpit and AMEs will be postponed for the month of August and shall be disbursed in two installments – 50% by September 11 and balance by September 26. The same formula was to be followed for September and October.
Jet top management including chief executive officer Vinay Dube has reportedly taken a salary cut of 25%.
In response to an FE query, a Jet spokesperson said, “Jet Airways today remitted half of the second instalment of pending emoluments of its pilots, AMEs and senior management for August 2018. The airline has also communicated a revised date of payment to the employees concerned and stands committed to honour its obligations.While the management regrets the attendant inconvenience, it also appreciates the continued support and understanding of its employees.
Jet’s salary bill for the first quarter of this financial year was Rs 816.29 crore, up 12.6% from `725.03 crore for the same quarter the previous year, which is about 13.6% of its `6,010 crore of revenues, the highest in the industry.
Jet posted a loss of Rs 1,323 crore for the quarter, its third-worst quarterly performance ever. It had tried to negotiate a salary cut with its pilots and engineers in August this year, but negotiations fell through.
The airline is on a cost-cutting and cost-saving mode and has a turnaround plan that targets savings of at least `2,000 crore over a couple of years.
It has gross debt of `8,424 crore with accumulated losses of ` 10,772 crore. It is also trying to get liquidity through sale and lease back mechanisms and monetisation of its flying miles programme.