India - At least 2,500 airline employees from India's domestic carriers are expected to lose their jobs in the next four to six months.
This makes up 8% of the total workforce employed by private carriers, which will set a combined loss of US$2 billion (SG$2.9 billion) in 2008 and 2009. Companies are not intending to go for large-scale retrenchments, but are instead taking employees off payrolls in phases.
Besides retrenchment, private airline carriers are also paring pay pockets of existing employees, according to a report by Livemint.
The trigger for retrenchment is a 20% capacity reduction this June, on top of the 15% cut in domestic flights in mid-2008 due to the rising cost of aviation turbine fuel and mounting losses. India's airlines were also hit by the slowing economy and received a 10% decline in passenger traffic during March.
Jet Airways India has handed pink slips to at least 36 employees who were 60 years and older. It has also terminated some of the cabin crew who were on probation and management staff, and shut down its offices in Singapore, Kuala Lumpur and Bangkok.
Jet's rival Kingfisher Airlines recently rationalised pilot salaries by using a remuneration structure linked to the number of flying hours. It has also retrenched 300 employees, and is reviewing the need of further trimming based on the proposed capacity reduction.
State-owned National Aviation Co. of India (Nacil) has put recruitments on freeze, along with GoAirlines India and Paramount Airways. As Nacil is a government-run company, it is not in a position to retrench staff. However, one of its executives said extending retired officers’ tenure will be restricted only in the operational areas with stringent terms and conditions.
On the other hand, low-fare carriers such as SpiceJet and InterGlobe Aviation are hiring selectively.
“If all airlines cut capacity, they will have to trim their workforce by 2,000-2,500. In the current situation, full-service carriers will have to take 15-20 planes out of operations and should implement strict cost-cutting measures,” says Kapil Kaul, chief executive, Indian subcontinent and Middle East at Centre for Asia Pacific Aviation.
One way of managing the crisis is to offer long leave to employees whom the airlines have invested training in, says Kaul. “The excess staff can be absorbed during the upturn and the airlines would not need to reinvest in training.”
