Shock and rage: Jet lays off 1,900
Fears that India’s once-booming airline industry was fast slipping into a slump got more real as Jet Airways announced it was laying off 1,900 employees and rival-turned-ally Kingfisher Airlines said it would follow suit, report Kamayani Singh, Lalatendu Mishra and Samiran Saha.india Updated: Oct 16, 2008 01:04 IST
Fears that India’s once-booming airline industry was fast slipping into a slump got more real as Jet Airways on Wednesday announced it was laying off 1,900 employees and rival-turned-ally Kingfisher Airlines said it would follow suit.
The news sparked angry protests from sacked employees in Mumbai and New Delhi, many of whom were told of their dismissal only after they showed up for work on Wednesday.
India’s first, mass overnight layoffs since the downturn began could be a precursor to what lies ahead. Like so many other sunrise sectors, the aviation business was a magnet for thousands who streamed in from small towns — often borrowing money from relatives to join training institutes — to be a part of globalising India.
“This is not fair. My father had taken a loan to get me here. Who will pay it back?” screamed a sacked cabin staffer of Jet Airways as India watched stunned, weeping employees on national television.
Aviation Minister Praful Patel, a strong votary for private airlines, said he “could not give directives to airlines on human resources”.
The job cuts at Jet came two days after it entered into an “alliance” with Kingfisher Airlines to slash costs.
“As painful as it may be for every single person affected, this adjustment was inevitable in the greater interest of regaining viability of Jet Airways and to securing its economic health,” said CEO Wolfgang Prock-Schauer.
India’s airlines ran up a combined loss of about Rs 4,000 crore in 2007-08.
The figure is predicted to double this year to Rs 8,000 crore, as a surge in jet fuel prices has pushed up operational cost and an economic slowdown, that’s getting worse by the day, has resulted in a sharp drop in air travel.
“We need to cut the flab. We need to be lean, mean and efficient,” said Vijay Mallya, Chairman of Kingfisher Airlines.
Kingfisher officials said they plan to lay off 300 people, but industry insiders said the toll could be higher and the airline might axe 3,000 employees, who came on board with the merger of Air Deccan.
The total job cuts at Jet and Kingfisher could go as high as 6,000, analysts said. Jet’s headcount stood at 14,500, while that Kingfisher, including Deccan, was 9,000, according to the last update on their websites.
“I believe both airline will cut 20 per cent of their non-core technical staff. Next in line would be pilots and engineers,” said Kapil Kaul at Centre for Asia Pacific Aviation.
The impact will cascade further as each direct job in the aviation sector creates seven more jobs in other sectors. Going by that count, the dwindling fortunes at Jet and Kingfisher might put nearly 50,000 jobs at stake.
“I had not thought in the wildest of my dreams that they would suddenly take away my job one day,” said Pulkeet Arora, a resident of Delhi, who quit a call center job to join Jet Airways.”There will be no Diwali for us this year.”