Posts Tagged ‘Jet Airways’

There has been a lot of news recently with regard to big losses realized by airlines in India due to high price of oil, weakening demand, fierce competition causing inability to raise fares to requirements and rapid growth over the past years.

Jet Airways
On Tuesday October 14th 2008, the airlines laid off 850 cabin crew members (total employees – 13,000) and a day later announced plans for laying off another 1,050 across different departments and functions (including pilots and management personnel). The the salary and benefits saving is reported to be around 50 million rupees (around US $1 million). The layoffs caused protests and have caused some political interest in the country. The airline has already announced capacity cuts along with discontinuation of some routes.

From Times of India

number of flights that Jet Airways will offer as part of its winter schedule
will be approximately 15% lower than originally planned. This is inevitable in
view of declining traffic volumes,” Jet Airways’ chief executive officer
Wolfgang Prock Schauer said.

Some international flights — like
on the Mumbai-Shanghai-San Francisco sector — have already been
discontinued. There are plans to withdraw the Amritsar-London service and
postpone the foray into Saudi Arabia.

Kingfisher Airlines
Kingfisher seems to be going the same route with a possibility of a “less painful” (with respect to Jet Airways) layoffs. There are talks about layoffs to come mostly from ex-Air Deccan employees.The airlines is already planning to return 7 aircrafts to the lessors. Also, the airline canceled orders for 3 Airbus A340 aircrafts and deferred deliveries of 32 Airbus A320 aircrafts.

From Times of India

“The last time when they fired 300 employees, they discarded a lot of good talent, which was surprising. However, they did it with much more dignity and grace than what Jet has displayed,” said a former Deccan employee. “This time around, they’re being more careful with who they want to fire.”
Pilots with little or no experience will be the first to go, while more experienced hands will be retained. “It’s the cabin crew that will be axed mercilessly and that will most certainly be from the Deccan side. As it is, Kingfisher has always looked down upon the Deccan staff, particularly the cabin crew. Their cabin crew are projected as models and they will not sack them as easily. There is a lot of panic among the Deccan cabin crew girls and they’ve been sending out their resumes to a lot of international airlines since hiring has seen an overall slowdown in all Indian airlines,” said a source.

Air India
Air India, the country’s national airline, announced that it is considering to offer leave without pay to as many as 15,000 employees for a period of up to 5 years. The airline added that the employees who will take this offer will be allowed to return back to same job with same seniority and pay rate. The airline did mention that the reduction plan was not mandatory and is not a retrenchment. It is hard for me to understand why the employees would take this offer unless there is a lay-off plan to follow.

From BBC

Civil Aviation Minister Praful Patel has stressed there were no plans compulsorily to prune staff numbers which currently total about 25,000 people.
“Air India is not going to have any job cuts. Certainly it [the aviation crisis] will affect the growth plans, it will affect the future employment opportunities which would have come the way of Air India in case the aviation industry was in a much better financial health,” Mr Patel told PTI.
“But as of now I do not have the luxury to say [anything] beyond the fact that those who are working for Air India shall continue to do so and we shall not have any issue of people being laid off.”


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Reuters reports that around 50 pilots in India each year get grounded because they are found to have consumed alcohol before their flight. India has one of the fastest growing airline industry with about around 5000 commercial pilots. Though, the number is 0.01% of the total (and even lesser for the number of flights affected since these seem to be isolated incidences), it does raise some concerns on safety.

This issue seems to have got attention after a pilot of Jetlite airline was caught inebriated on Saturday June 21st 2008 Morning and as a result caused the cancellation of the Delhi-Patna flight.

More cases had been reported recently like – (from here) –

This is not the first time, though, that airline crew and pilots have been found intoxicated while on duty.

An Air Deccan pilot was found inebriated on 12 April, 2006, by a DGCA team during a random test.

On October 12, 2007, a Kingfisher Airways pilot had been grounded for three months after being caught at IGI Airport.

On October 28, 2007, an airhostess of a
Mumbai-bound Jet Airways flight, tested alcohol positive during
pre-flight testing. She was grounded for three months.

I think there is a need for increased random checks and harsher punishments (even prison time for repeat offenders) before this issue causes some serious accident!

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Indian domestic carriers are expected to lose $1.5 billion this year. This expected loss is double of last year’s loss due to high jet fuel prices.

From Bloomberg

“Indian carriers this month raised surcharges for the third
time in as many months to counter the rise in fuel prices. Taxes
and surcharges now account for as much as 85 percent of a ticket
for a budget airline between Mumbai and New Delhi, curbing
passenger growth that’s critical for airlines to fund about $30
billion of plane purchases from Airbus SAS and Boeing Co.”

There could have been some relief, if the airlines would have acted prudently and hedged some oil. In 2007, Reserve Bank of India (RBI) allowed airline companies in India to hedge fuel. But due to stabilizing fuel prices prevented the airlines to take advantage.

From Economic Times

Airways, the country’s leading airline company, is suffering losses of
around $2-3 million daily on account of rising crude oil prices. The company
unfortunately hasn’t hedged its fuel needs.

“Hedging has not been
traditionally done in India. In hindsight, it sounds wise today to have done
that,” says Go Air spokesperson Neeraj Kapoor.

The company is evaluating the
process of hedging. Air India started hedging 10% of its oil requirement four
years ago on the international exchanges and increased it to 15% consequently.
However, it stopped hedging altogether once crude oil prices stabilised above
$40 a barrel. “Now, the airline is again looking at resuming the
process,” says Air India spokesperson Jitendra

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Chicago based US carrier, United Airlines, has entered a codeshare and frequent flyer partnership agreement with India’s Jet Airways.

From Forbes Article

“United will have service to 13 cities in India, including Bangalore, Kolkatta, Mumbai, and New Delhi. Jet Airways customers may travel to United’s five hubs, Chicago, Denver, Los Angeles, San Francisco, and Washington, as well as more than 20 other cities across the U.S. the company said.”

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