Jet lays off 600 employees

A day after striking an alliance with rival Kingfisher Airlines, India’s leading private carrier Jet Airways...

A day after striking an alliance with rival Kingfisher Airlines, India’s leading private carrier Jet Airways has decided to lay off over 600 cabin crew and customer service officials as part of a cost-cutting exercise.

Confirming the development, a Jet Airways official said, “The airline has decided to lay off over 600 staffers to cut costs and service the airline’s expansion plans.”

The downsizing has come at a time when airlines across the world are bleeding with losses due to the steep rise in jet fuel.

Meanwhile, airline officials are upbeat about the deal with Kingfisher, which many insiders say might just lead to a merger if market conditions remain the way they are. “What we have forged is a marketing alliance and the purpose is to improve the topline in terms of efficiency, rationalising of routes and to collaborate in areas like back-office operations and ground-handling services to cut down on the high costs of operation,” said Sudheer Raghavan, Jet’s Chief Commercial Officer.

“With staff salaries accounting for only 11 to 12 per cent of total costs and Aviation Turbine Fuel (ATF) almost doubling where is the synergy?” questions aviation analyst Sandeep Shenoy of Pioneer Intermediaries.

The new alliance between Jet Airways and Kingfisher Airlines is expected to mark a new era of co-operation in the airline service industry and could accelerate the route to profitability, rating agency Crisil has said.

“The airlines have taken a co-operative route towards profitability through this innovative alliance,” Crisil Research Head Ajay D’Souza said in a release here today.

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Jet Airways as well as Kingfisher today failed to retain the sharp gains of up to 17 per cent registered in the intra-day trade on the back of their plans to come together for cutting costs in the current economic scenario. Shares of both the companies closed in the negative territory at the Bombay Stock Exchange after rallying between 16-17 per cent earlier in the day.

Jet shares settled 0.21 per cent down at Rs 289.40 and Kingfisher closed 2.34 per cent down at Rs 50.15 at the BSE. However, at the NSE, Jet managed to settle with a marginal gain of 0.17 per cent at Rs 289.40, while Kingfisher settled 3.66 per cent in the red at Rs 49.95 at the bourse. (With PTI)