India’s Jet Airways delays paying salaries to some staff
As part of a turnaround plan, India's second-largest airline also aims to cut costs by 20 billion rupees (US$ 277.88 million)
Beleaguered Indian airline Jet Airways has now delayed paying the salaries of nearly 20% of its staff. Those affected are mostly in the higher pay brackets, and include pilots.
India’s second-largest airline, which has embarked on a cost-cutting drive in an attempt to reverse failing fortunes, said that it has paid August salaries to over 84% of its employees and that the rest in all likelihood would get them by mid-month, Financial Express reports.
The airline said it was undertaking definite steps to turn around its business and is evaluating various funding options to resolve its difficulties, the daily added.
As part of its turnaround plan, Jet aims to cut costs to the tune of 20 billion rupees (US$ 277.88 million) to offset losses incurred due to increased operational costs.
At 12 noon on Wednesday the share price of Jet Airways on the National Stock Exchange was 265.10 rupees, down from a previous close of 271.60 rupees.
Earlier the airline had posted a net loss of 13.26 billion rupees (US$189 million) in the April-June quarter of the 2018-19 financial year. This was its third-highest quarterly loss.
The airline blamed increases in costs and low fares for the loss, and poor showings were visible across the Indian aviation sector. Rival IndiGo’s profit fell 97% in the quarter, while SpiceJet was 380 million rupees in the red.
Consulting firm CAPA India has forecast that the industry will lose up to US$ 1.9 billion in the financial year ending March 31, up from a January estimate of a loss of $430 million to $460 million. The difference is being attributed to a weakening rupee and rising oil prices.