Business strategy

Jet Airways Sends 60% Staff On Leave Without Pay, Cuts Up To 50% Salaries of Some Employees: Reports

Jet Airways has decided to send about 60 per cent of its employees, including senior management, on leave without pay (LWP) for three months starting December 1, according to a CNBC-TV18 report. The airline has also cut some employees’ salaries by up to 50 per cent. The development comes on the day when Jalan-Kalrock Consortium, which won the bid for resurrecting the airline, released a statement indicating that it might have to take “difficult decisions” in the near term.

Jet Airways CEO Sanjiv Kapoor told CNBC-TV18, “Some employees have taken a temporary pay cut, some have been put on Leave Without Pay temporarily.”

According to a report by Moneycontrol, even Jet Airways CEO Sanjiv Kapoor has agreed to take a substantial pay cut. However, Kapoor on Twitter said, “No one is being fired.”

According to a report by ET, the Jalan Kalrock Consortium (JKC) has temporarily reduced some employees’ salaries by up to 50 per cent, apart from sending some others on leave without pay.

Jet Airways in a statement said, “While we await the handover of the company as per the NCLT process, the longer-than-expected time being taken for the same may result in some difficult but necessary near-term decisions to manage our cashflows to secure the future while the airline is still not in our possession.”

The new owner Jalan-Kalrock consortium has 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 to employees.

As per reports, the Jalan-Kalrock consortium had two payment deadlines that were missed. First, the consortium had to pay Rs 52 crore to workmen and employees of the erstwhile airline by the end of business on November 11. CNBC-TV18 earlier reported that this payment was not made. The second deadline has to do with the payment of Rs 185 crore to various lenders. The consortium had till November 16 to make this payment.

The consortium had committed to infuse Rs 900 crore towards capital expenditure and working capital. JKC has so far deposited only Rs 150 crore as a performance guarantee.

Recently, asset management firm Kalrock Capital Partners also said probes into its investor Florian Fritsch have no impact on its acquisition of Jet Airways. Fritsch is assisting in investigations by regulatory agencies in Liechtenstein, Switzerland, and Austria. Investigators in Austria, Liechtenstein and Switzerland last week raided properties linked to Florian Fritsch in connection with a money laundering probe.

The revival of Jet Airways has hit difficulties that is making delaying its operation resumption. In April, Sanjiv Kapoor, the CEO of Jet Airways, had said the airline was targetting to fly its aircrafts in the July-September quarter. In May, Jet Airways conducted its test flight to and from the Hyderabad airport in a step towards obtaining the air operator certificate.

Jet Airways, which has not flown since April 17, 2019, is currently in the process of re-launching operations under its new promoters Jalan-Kalrock Consortium. The airline’s CEO Sanjiv Kapoor had said the test flight’s operation was a very emotional moment “for all the wonderful folks who have been working hard to get Jet back in the skies”.

Kalrock Capital and UAE-based businessman Murari Lal Jalan were selected by lenders to revive the grounded airline in October 2020.

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