Jet Airways, India’s second-largest airline by market share, has asked dozens of its junior-ranking pilots to accept 30-50 percent pay cuts, or quit, as it moves to bring down its costs, according to two sources and letters seen by Reuters.
Jet Airways has proposed salary and stipend cuts in letters sent to pilots earlier this month, saying it was forced to take such steps as it was “intensely focused on fleet and network rationalisation”.
The move, to be implemented from Aug. 1, is likely to impact up to 400 pilots, said the two sources, who asked not to be named.
A third source close to the development said Jet had to make some work adjustments with pilots, as it has rationalised its network given weakness in the Gulf region and improved fleet utilization.
Jet Airways, which has the highest cost structure among all the major private-sector carriers in India, did not immediately respond to a request for comment.
Jet Airways has struggled to keep a lid on costs in one of the world’s fastest-growing aviation markets where competition from low-cost carriers such as InterGlobe Aviation’s (INGL.NS) IndiGo and SpiceJet (SPJT.BO) is on the rise and is putting it under pressure.
The Indian airline, partly-owned by Etihad Airways of the United Arab Emirates, is also facing headwinds in the international market due to uncertainty in the oil-rich Gulf region which is hurting its revenues.