Despite several rounds of cost-cutting measures, the company continued to bleed cash and needed drastic measures to cut costs.
With the countdown underway, the full-service airline company was believed to be in discussions with certain sections of employees on the salary cut proposal, which has been mooted amid efforts to save costs and avoid grounding of its planes.
Pilots and engineers who had refused a proposed 15 per cent pay-check cut for two years had been informed that the airline was running out of time to slash costs and raise revenue, according to reports.
“We have been informed that the airline cannot run beyond two months and the management needs to cut cost through pay cuts and other means to ensure that it stays afloat beyond that. The airline did not inform us about all this all these years which has dented trust of employees in the management,” The Economic Times quoted a Jet Airways senior executive as saying.
India’s oldest private sector airline was looking for working capital loans but banks wanted it to show a turnaround commitment, the source said.
Apart from the salary-cut, which is expected to last up to 24 months, the airline company has also waived the notice period requirements of its pilots and laid-off most of its engineering staff.
Jet Airways slumps 6% in morning trade on bourses
Shares of the company on Friday opened on a weak note at Rs 324.80, then fell 5.72 per cent to a low of Rs 312.25 on Bombay Stock Exchange (BSE) after reports surfaced that the company’s financials are in bad shape and drastic measures need to be taken to cut costs.
Similar movement was seen on the National Stock Exchange as well, where the stock of the company opened at Rs 323.90, then fell to a low of Rs 312.15, down 5.73 per cent over its previous closing price.
Jet Airways, which completed 25 years of operations earlier this year, had 16,558 permanent employees as on March 31, 2018.
Besides, there were a total of 6,306 temporary/casual employees, as per the airline’s annual report for 2017-18.
(With inputs from agencies)