Jet Airways caught in a tailspin over pay cuts

REASON FOR HIRING EXPATS: Foreign pilots are insurance against the Indian pilots holding the airline to ransom.

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Us and them. No, this is not a plug for the Pink Floyd song. This is the great divide that Jet Airways chairman Naresh Goyal is dealing with, as he struggles to keep his airline afloat in these turbulent times. Matters in the company are taking a turn for the worse as the management is unable to push through a salary cut (up to 25 per cent), with the unions refusing to even have a discussion unless expat employees are eased out.

It’s not just the arithmetic of Jet’s negotiations with its employees on salary cuts that is tricky. Goyal’s top negotiation team, including the newest entrant, Ravi Chaturvedi—who has joined the airline from Proctor & Gamble in the US—has to parley with dozens of formal and informal representatives of its employees. The most aggressive and organised among them is SWIP (Society for Welfare of Indian Pilots), which has categorically refused to discuss pay cuts as long as foreign pilots are still in the picture. The foreigners have three year, fixed-pay contracts, and hence will not take on any of the pain.

Former Indian Airlines chairman and managing director, Air Marshal (retd) S Ramdas, has another take on the issue. He says the foreign pilots are insurance against the Indian pilots holding the airline management to ransom. “You can’t have one category of employees blackmailing the company. Pilots think they run the company, they don’t. They just fly the machines,” he says. Air Marshal Ramdas had his own run-in with pilot unions at Indian Airlines in 1991, when he took a hard line stopping transfers. When forced to rescind his decision by the then minister for civil aviation, Madhavrao Scindia, he chose to quit.

Experts point out that Jet Airways’ consolidation as a leading player in the Indian skies in the last decade-and-a-half, has owed a lot to smooth sailing on the personnel front. The private airline was able to attract the best talent from across the globe, and never faced the kind of labour problems that Indian Airlines and Air India had to deal with. However, now the lack of experience in dealing with issues like these is hitting Jet hard.