Amidst the dismal financial performance by leading airline Jet Airways over the last three quarters, there is a huge challenge being faced by the airlines to keep its services afloat.
Since October, the airline company has been inconsistent in paying the salaries of the higher officers and pilots. Over the years, Jet Airways has undergone a grave net loss of approximately Rs. 1,200 crore during the month of September.
Amid the financial loss, the company had been defaulting on the salary payments of its employees including the pilots, engineers, and the senior management which accounts to almost 15 percent of the total workforce. 14 flights were cancelled yesterday after the pilots reported sick over unpaid salaries. A Jet Airways spokesperson tweeted about the cancelled flights on December 2 and said “would like to reiterate that the reason for cancellations of 2nd Dec flights was due to an unforeseen operational circumstance and not pilot non-cooperation, as being unduly speculated.”
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Jet Airways spokesperson on 14 Jet Airways flights cancelled yesterday after pilots reportedly called in sick: The management is in regular dialogue with pilots and other teams to discuss and resolve on-going issues including disbursement of salaries. https://t.co/qFwljCWcCr
— ANI (@ANI) December 3, 2018
The issue has led to a disruption in a number of domestic and international routes including seven Gulf routes which have been withdrawn by Jet Airways. The company led by Naresh Goyal will not operate in almost 39 services to Abu Dhabi, Dubai, Muscat, and Doha from a number of domestic cities.
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The routes that have currently been cancelled are Doha from Kochi, Kozhikode, and Thiruvananthapuram and Abu Dhabi from Lucknow and Mangalore. The Mangalore to Dubai and Delhi to Muscat routes will also be called off. At present, Jet Airways operates one daily service from Kochi-Doha, Mangalore-Abu Dhabi, Mangalore-Dubai, and Lucknow-Abu Dhabi.
The Abu Dhabi based Etihad Airways holds 24 percent stake in the domestic service carrier. Jet Airways has not posted a profit for the past 11 years, barring FY16 and FY17, but its costs have been rising and has reportedly not paid staff salaries for an extended period of time.
It has been in talks with with multiple investors for stake sale and raise funds. It was also in talks to sell its loyalty programme Jet Privilege on a stand-alone basis, as it was touted to fetch a high valuation.