New Delhi: Low-cost carrier SpiceJet appear to be making the most of the crisis at Jet Airways. Spicejet is now hiring engineers and pilots at much lower pay than their current salaries at the financialy-troubled Jet.
Industry sources said pilots from Jet Airways are being asked to take salary cuts of 25-30 per cent, while engineers have been advised to settle at 50 per cent of their current pay package.
Not long ago, many airlines, including SpiceJet, were luring the same pilots and engineers with joining bonuses and better perks. “The prospect of closure is certainly one reason for professionals agreeing to take salary cuts. But average salaries at Jet Airways have also been higher than the industry level,” a top aviation source said.
A senior aircraft maintenance engineer who has applied to SpiceJet and Air India Express for a job said that he has got an offer in the range of Rs1,50,000 to 2,00,000 a month while his current cost to company (CTC) at Jet Airways is nearly Rs4,00,000 a month.
“The offer is much lower. It will certainly be a forced choice. We are hoping that some investor would take over Jet and our salaries will remain protected,” he said.
A SpiceJet executive said that the budget carrier was offering salaries based on their own structure and not the highly inflated one paid by Jet Airways.
A senior commander with Jet Airways said pilots with 4-5 years of experience are going to other airlines as they are feeling the pinch of salary delays.
“They have loans and other financial commitments; so they are looking for places where there is certainty of jobs and timely salary payment. Not many senior-level pilots have so far left Jet Airways. They are reluctant to go to either SpiceJet, IndiGo or Air India Express as they feel their seniority and salary will be impacted. They do not want to sign 3-5 year bonds,” he said.
The flying veteran noted that many co-pilots who do not have much experience generally get about Rs 2.9 lakh salary month at Jet Airways, and they are willing to join other airlines for even less than Rs 2 lakh a month.
Among various domestic airlines, only Air India Express and SpiceJet operate Boeing fleets, apart from Jet Airways. Those operating Airbus aircraft fear huge conversion costs for both pilots and engineers and are, thus, reluctant to hire the technical personnel from Jet.
“We will have to train them for flying and maintenance of Airbus aircraft. In case of pilots, it will need six months of training, while for engineers the reskilling would take 3-4 months. This means the salary for entire training period will be a huge cost for us,” said an executive of a private airline operating Airbus planes.
But aviation experts feel that the current situation is temporary and it will normalise once Jet gets back on its feet.
“This is an unusual situation because Jet Airways remains almost grounded. Normally, supply and demand have been in favour of pilots and engineers. Now, it depends on how quickly Jet restarts again. If that happens things will stabilise. I won’t be surprised if many pilots and engineers go back to Jet,” said Rajan Mehra, a veteran aviation professional and Chief Executive Officer Club One Air.
Saddled with mounting debt and losses, Jet Airways is fighting for its survival. The airline is in gradual descent and staring at closure with nearly 90 per cent of its fleet on the ground.
Holiday air fares may rise
New Delhi: The 2019 summer holiday travel season is expected to be marred by high air fares as debt-ridden Jet Airways gradually truncates flight operations, experts said.
Even though the airline, lenders and the government are still hopeful of a revival, the current trend might see Jet operating a bare minimum fleet, thus bumping up air fares.
“The grounding of aircraft due to liquidity issues with Jet Airways and regulatory directive for the grounding of B737 Max aircraft have resulted in 15 per cent impact on the industry capacity,” said Kinjal Shah, Vice President, Corporate Ratings, ICRA.
“This has definitely resulted in passenger inconvenience. Furthermore, it has resulted in a significant increase in fares. With the industry capacity remaining constrained, the fares are expected to remain high in the near term.” Jet’s woes assume criticality as the airline which once operated around 120 aircraft is left with just 16 in its fleet. Last Friday it operated 11 aircraft.
“With Jet now cancelling international flights, the rising fare situation is set to get worse if capacity is not increased before peak summer travel season,” said Aloke Bajpai, CEO and Co-founder, ixigo.
“A comparative analysis of April 2019 fares and what the scenario was last year shows that fares for flights originating from Delhi have increased by 19 per cent and fares for flights from Mumbai are up by 36 per cent. Passengers who are planning their summer leisure travel will also be impacted due to availability of seats.”
According to Sharat Dhall, COO (B2C), Yatra.com said: “With the peak travel season having kicked off, we expect airlines to induct more aircrafts to tap into the increased demand on the key business and leisure routes. This will also result in a rationalisation of air fares and we expect them to increase only marginally as compared to the same season last year.”
In addition, Dhall said: “We see other carriers adding capacity on a daily basis to fill the demand-supply gap and that is keeping fares under control.” “It is only the last-minute fares that are seeing a jump. So it is unlikely to impact the summer vacation travel season as most leisure travellers book well in advance and will not be impacted.” The trend of high air fares that was triggered due to Jet’s truncation of its operations was amplified by oil marketing companies, as they increased the price of aviation turbine fuel (ATF).
Since March 14, passengers had to shell out high fares as several more flights were cancelled due to grounding of Boeing 737-MAX aircraft.
Culmination of these factors is expected to decelerate the growth of air passenger traffic in the country.
In a recent note, ratings agency Fitch said that Indian aviation market has seen a sharp increase in air fares in the last few months due to tight supply, which has been worsened by the suspension of the 737 MAX aircraft.
“Fitch expects the growth in revenue passenger kilometres (RPK), which decelerated to 12.4 per cent in January (2018: 19.9 per cent), to weaken further until supply increases,” the rating agency said in a note.
In addition, the note said that Jet Airways, which along with its subsidiary JetLite, had the second-largest share of the domestic market until January, has been steadily losing market share as it has been forced to shrink its operating fleet due to financial troubles.
Independent director quits
Mumbai: Rajshree Pathy, an Independent Director of the crisis-hit Jet Airways’ has resigned from the post, the company said on Sunday. Pathy resigned with effect from April 13, according to a regulatory filing by the airline. “This is to inform that Rajshree Pathy, has submitted her resignation as an Independent Director of the Company with effect from April 13, 2019, owing to time constraints on account of her other current commitments,” it said.
Flight cancellation extended
Mumbai: Crisis-hit Jet Airways Sunday said it has extended the cancellation of its west-bound flights — to and from Amsterdam, London and Paris — until April 16. The airline had, on April 12, extended the suspension of its services to these destinations till April 15. “Jet Airways would like to clarify that it has currently suspended operations to SAARC and ASEAN destinations, as well as to or from Toronto and Paris from Chennai. The airline has also cancelled its long-haul, west-bound operations to or from Amsterdam, London Heathrow, and Paris until April 16, 2019,” a Jet spokesperson said. The spokesperson also said that the airline has restricted sales on certain routes for a few days in order to re-accommodate guests “who have unfortunately been inconvenienced by the interim cancellations”.
East forward booking stopped
Mumbai: Jet Airways has stopped forward bookings for some of its international sectors, including those for east Asia, sources said Sunday. Currently, the airline has suspended international operations till Monday afternoon. Accordingly, the company has informed the country’s aviation regulator that it has stopped taking forward bookings for its flights to SAARC and ASEAN destinations including Colombo, Kathmandu, Singapore, and Hong Kong till further notice. “They have informed that DGCA about suspension of forward-bookings for SAARC and ASEAN routes. For now, there is no certainty about when the forward bookings for these sectors will be re-started, since everything is dependent on capital infusion, which is stuck with the consortium of lenders,” an airline insider in Mumbai said.
—ians