Cutting cost: Jet to go for sale, lease-back of aircraft

What could be seen as a repeat of 2008, Jet Airways on Monday said it will ‘rationalise' its manpower to cut losses. The company reported a net loss of Rs 713 crore for quarter ending September 30.

Jet Airways had handed pink slips to over 800 employees in 2008. But, after intense pressure, it had to take back all those employees.

Addressing analysts after declaring the quarterly results, the company management said that it will go in for sale and lease-back of some of its aircraft. With rationalisation and other measures, the company aims to prune its cost (excluding fuel) by 5-10 per cent.

Though the management did not give more details about the rationalisation exercise, sources told

Business Line that the company is eyeing all contractual workers who are over 60 years and also junior employees who are being supplied by outsourcing agencies. The overall reduction in manpower could well add up to 10 per cent. The company has at present nearly 16,000 employees. During the July-September quarter, its wage bill increased by 27 per cent to Rs 407.15 crore. The wage bill is also soaring because of rupee depreciation. It has added 2,000 employees during the last one year. Regular employees of the company are unlikely to be affected by the rationalisation process. However, they will have to wait for further increment and promotions, sources added.

As a part of cost-saving measures, the company has shut down its operation base in Hyderabad and Bangalore. Now, Chennai will take care of both the places. Normally, airlines have operation base where the planes are parked overnight.

Mr Sudheer Raghavan, Chief Commercial Officer of the company, said fares have increased by 18-20 per cent over the last few weeks. This is on account of arrival of the busy season and also because Kingfisher Airlines withdrew some capacity suddenly.

The company is hopeful of getting an additional $100 million (about Rs 495 crore) from the sale of BKC property to Godrej.

Shishir.s@thehindu.co.in