The grounded air carrier Jet Airways has decided to send 60 per cent of its employees, including senior managers, on leave without pay and slash salaries of some employees by up to 50 per cent effective December 1, said reports from Indian media outlets.
Employees at junior and lower levels will have no impact of the salary cut decision due to their low pay grade though CEO, CFO and even head of departments may take a 50 per cent salary cut.
Jet Airways with an employee strength of 230 has around 100 cabin crew and junior managers in the low level employee category, said a Business Standard report.
Further reports said that around 60 mid to senior level employees have been sent on two months’ leave without pay.
Moneycontrol reported that the news comes after Jet Airways’ revival plan hit one more hurdle on November 18, when its new owner Jalan-Kalrock consortium told the National Company Law Appellate Tribunal (NCLAT) of its inability to pay additional money to clear provident fund and gratuity dues of around Rs 250 crore (INR 2500 million) to employees.
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The company’s CEO Sanjay Kapoor took to Twitter to soothe nerves and said, “No one is being fired.”
As the NCLT process takes longer-than-expected time, the grounded air carrier may have to take “difficult but necessary near-term decisions” to manage their cash flows to secure the future as they await the airline’s complete possession, a Jet Airways spokesperson had said.
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The consortium had moved the NCLT to seek control of the airline. The tribunal, which will hear the case from November 29, has sought a reply from the State Bank of India (SBI)-led consortium of lenders, said reports.
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The panel monitoring Jet Airways’ insolvency case has put the airline’s monetisation plan on hold amid the impasse between the lenders and consortium which remained steadfast on its Rs 475 crore (INR 4750 million) offer in its bid, saying that it is not liable to pay anything beyond to creditors and all claims must be settled within this.
The NCLT had approved the consortium’s capital infusion plan of Rs 1,375 crore (INR 13750 million), including Rs 900 crore (INR 9000 million) for capital expenditure and Rs 475 crore (INR 4750 million) to settle claims of all creditors.
NCLAT on October 21, had asked the consortium to clear unpaid provident funds and gratuity to workmen and employees of the airline until June 2019 when the insolvency process was initiated.
According to Moneycontrol, even Jet Airways CEO Sanjiv Kapoor has also agreed to a pay cut.
(With inputs from agencies)
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