Facing financial crisis, Jet Airways Ltd has informed its staff that it won’t be able to operate beyond 60 days unless cost cuts are put in place. The aircraft has reportedly sought investment bankers’ help to sell a stake in the carrier again.
According to reports, chairman Naresh Goyal informed employees that the carrier’s financials are not in a good shape and drastic measures are required such as salary cuts.
On August 1, the airline had proposed a 25 percent pay cut for employees. However, the proposal had to be taken back after protests.
“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 the trust of employees in the management,” Jet Airways senior executive was quoted by ET as saying.
The airline has stressed that it was implementing measures to cut cost but on being asked about the 60-day deadline, the airline has not given any specific answers.
As per reports, some of the measures will be taken in sales and distribution, payroll and maintenance and other areas for saving to create a “more resilient business”.
Jet Airways is right now looking for working capital loans but banks want some commitment and the salary reduction was a part of the displaying the same commitment.
Many employees fear losing their jobs and the most secure position of the pilot is also reportedly under the management’s radar.
Shares of Jet Airways went down 4.2 percent soon after the reports of cost-cutting erupted.
Among many reasons, soaring fuel prices and a weaker rupee are causing the Indian airlines huge losses. Even country’s leading carrier IndiGo has reported a 97 percent downfall in profits.
Last month, Jet Airways was reported to have bought 75 Boeing Co 737 to meet the growing domestic demand, taking its total number of wide-body planes to 225.