Pay cut on radar for Jet top brass
Top on the agenda is a pay cut for senior and middle managers, with slowdown-hit demand keeping 40 per cent of seats unoccupied, reports Lalatendu Mishra.business Updated: Oct 17, 2008 22:41 IST
Those who ask you to fasten your seat belts are now busy tightening their belts. A day after Chairman Naresh Goyal decided to take back 1,900 suddenly retrenched employees in a quick U-turn, cost-cutting is taking a different mode as the airline industry counts its losses.
Top on the agenda is a pay cut for senior and middle managers, with slowdown-hit demand keeping 40 per cent of seats unoccupied. A company spokesperson said “no such decision has been taken so far,” but Goyal has spoken of salaries among key items.
In 2007-08, Jet’s wage bill was Rs 1,388 crore. The 1,900 probationers hit this week would have saved Rs. 60 crore a year — only 4.3 per cent of the wage bill.
Intensifying competition with more airlines being launched in the last three years had led to salaries of employees in the aviation sector hitting the roof.
“It’s time now to make some sacrifices,” said a Jet Airways official, who did not want to be identified.
A cut in top management salary is expected to send a stronger message to the junior employees.
Also, variable pay linked to working hours put in will be used to keep costs low. The cabin crew, pilots and engineers have 70 per cent of their pay package as allowances. Their take-home salary could drop by as much as 40 per cent to an average of Rs 18,000 from Rs 30,000 in normal times.
Now that flight movements have been curtailed by 15 per cent and another 30 per cent capacity reduction is on the cards, the permanent pilots and cabin crew would see a substantial reduction in their flying hours. This would directly affect their take home salaries.