Kir Fma Final

8/3/2019 Kir Fma Final

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JET AIRWAYS

Jet Airways, which commenced operations on May 5, 1993, has within a short span of 14

years established its position as a market leader. The airline has had the distinction of

being repeatedly adjudged India's 'Best Domestic Airline' and has won several national

and international awards.

Jet Airways currently operates more than 365 flights daily with a fleet of 80 aircraft,

which includes 10 Boeing 777-300 ER aircraft, 8 Airbus A330-200 aircraft, 53 classic

and next generation Boeing 737-400/700/800/900 aircraft and 9 modern ATR 72-500

turboprop aircraft. With an average fleet age of 4.3 years, it is the operator of the

youngest aircraft fleet in Asia.

Jet Airways flies to 59 destinations that span the length and breadth of India and also

beyond, including New York (both JFK and Newark) Toronto, Brussels, London

(Heathrow). In South-East Asia it covers Singapore, Kuala Lumpur, Colombo, and

Bangkok. Its destination also includes Kathmandu, Dhaka, Kuwait, Bahrain, Muscat and

Doha. The primary hub and maintenance base is Mumbai; whereas Delhi, Kolkata,Chennai,

Pune, Bengaluru and Brussels act as Secondary Hubs.


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Analysis of Operational Performance Fiscal 2011 Compared to Fiscal 2010

Revenues

Our total operating revenues of Rs.1,277,683 lakhs in Fiscal 2011 compared to Rs.1,046,964

lakhs in Fiscal 2010 anincrease of 22%. The higher revenues were on account of increase in the

level of operations, increase in the numberof passengers and cargo revenue.

Passenger Revenues

In Fiscal 2011 passenger revenues were at Rs.1,057,081 lakhs as compared to Rs.854,973 lakhs

in Fiscal 2010. The increase of 23.6 % was mainly due to the increase of 21.8% in number of

passengers carried as compared with the previous year.

Revenues from Excess Baggage Revenues from excess baggage increased by 58.8% to Rs.5,596

lakhs in Fiscal 2011 from Rs.3,524 lakhs in Fiscal 2010.

Revenues from Cargo

Revenues from the carriage of cargo increased by 36.8% to Rs.115,995 lakhs in Fiscal 2011 from

Rs.84,776 lakhs in Fiscal 2010. This increase was largely a result of an increase in the level of

operations, introduction of new international routes and change in the Jet Airways Konnect and

full service mix over last year.

Other Revenues

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ther revenues decreased to Rs.99,011 lakhs in Fiscal 2011 from Rs.103,691 lakhs in Fiscal2010. This was mainly due to the decrease in income from leasing out aircraft which reduced to

Rs.51,724 lakhs in Fiscal 2011 from Rs.71,768 lakhs in Fiscal 2010.

Non-Operating Revenues

Non-operating Revenues increased by 13.7% to Rs.17,421 lakhs in Fiscal 2011 from Rs.15,328

lakhs in Fiscal 2010.

Expenses

Total expenses for Fiscal 2011 increased by 17.1 % to Rs.1,307,483 lakhs from Rs.1,116,092lakhs in Fiscal 2010.

Aircraft Fuel

Fuel costs increased by 38.6% to Rs.436,670 lakhs for Fiscal 2011 from Rs.315,165 lakhs in Fiscal

2010. Thisincrease was mainly due to:


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A major increase in Aviation Turbine Fuel (ATF) rates on account of increase in crude oil

prices. The average rate per litre of fuel (for domestic operations) for Fiscal 2011 was

Rs.45.01 vs average rate of Rs.37.77 for Fiscal

2010. The rates for International operations were Rs.30.29 in Fiscal 2011 vs Rs.25.36 in

Fiscal 2010.

There was also an increase in block hours flown from 306,134 hours in Fiscal 2010 to

350,161 hours in Fiscal 2011, as a result of increase in the level of operations.

As in previous years , in the year under review also we did not hedge any part of our

fuel requirements, and believe that the pass through mechanism of higher fuel

surcharges is currently an effective method of combating this given the highly volatile

nature of crude oil prices. More established carriers such as Lufthansa, Singapore

Airlines have a consistent policy of hedging a certain proportion of their fuel

requirements notwithstanding theprice levels. Jet Airways is yet to reach a maturity

level such as these airlines.

Other Operating Expenses

Other Operating Expenses increased by 10.3% to Rs.332,088 lakhs for Fiscal 2011 from

Rs.301,111 lakhs in Fiscal 2010 as summarized below:

The increase in maintenance and repair costs in 2011 was essentially due to an increase

in block hours operated from 306,134 hours in Fiscal 2010 to 350,161 hours in Fiscal

2011.


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The landing & navigation charges were higher because of increase in the number of

flights operated over the previous year; we also started 2 new international routes with

our A330 aircraft.

The decrease in insurance costs is due to the reduced rate negotiated for the year.

The increase in general and administrative expenses in Fiscal 2011 over Fiscal 2010 is

attributable to:

The increase in food and cabin expenses by 6.8% from Rs.46,000 lakhs to Rs.49,114

lakhs due to the change in the mix of full service and Jet Airways Konnect operations

over the last year along with the level of operations going up.

The increase in expenses relating to crew accommodation, transportation and

allowances by 17.1% from Rs.15,243 lakhs to Rs.17,854 lakhs because of the expansion

of services in the Domestic market.

Employee Remuneration and Benefits

Expenses with regard to employee remuneration and benefits increased by 9.4% to Rs.134,219

lakhs in Fiscal 2011 from Rs.122,655 lakhs in Fiscal 2010 due to increase in the personnel

employed to support the increase in the flights operated. This is as against an increase in

Available Seat Kilometers (capacity) of 17.4% signifying productivity improvements in employee

costs.As of March 2011, our headcount had increased to 13,177 vs 11,788 in March 2010 inorder to support the increased level of operations. Our average number of personnel employed

reduced from 12,060 in Fiscal 2010 to11,927 in Fiscal 2011.Overall, our employees per aircraft

ratio went down from 141 in Fiscal 2010 to 133 in Fiscal 2011 signifying animprovement in

employees productivity.

Selling and Distribution Costs

Selling and distribution costs increased by 28.1% to Rs.126,172 lakhs for Fiscal 2011 from

Rs.98,491 lakhs in Fiscal2010. This increase in costs was a result of:

Increase in the commission cost due to the increase in the revenues.

Increase in the advertising costs mainly due to the route launch costs of the new

international routes launched during the year.


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Lease Rentals

Aircraft rentals increased by 1.5% to Rs.84,436 lakhs in Fiscal 2011 from Rs.83,173 lakhs in

Fiscal 2010 mainly on

account of:

The number of leased ATR aircraft increased from 14 to 20

The induction of 4 leased Boeing 737-800 aircraft

Depreciation

Depreciation decreased by 5.3% to Rs.91,062 lakhs in Fiscal 2011 from Rs.96,196 lakhs in Fiscal

2010 mainly on account of change in the method of depreciation on all assets other than

aircraft from Written Down Value method to Straight Line method.

Interest Expense

Interest expenses increased by 3.6% to Rs.102,836 lakhs in Fiscal 2011 from Rs.99,301 lakhs in

Fiscal 2010 largely due to the increase in working capital requirements.During the Fiscal year,

we converted a significant proportion of our Indian Rupee loans to US dollar loans with aview

to reduce interest costs. Though this will result in an interest cost reduction it will increase our

exposure to foreign currency (mainly USD) fluctuations.

Exceptional ItemsThese include gains of Rs.4,817 lakhs due to Mark-to-Market valuation of outstanding

derivative contracts comparedto a gain of Rs.7,045 lakhs in Fiscal 2010 and a gain of Rs.12,225

lakhs due to excess depreciation reversed.

Profit/ (Loss) before Taxation

Profit before taxation was Rs.4,663 lakhs in Fiscal 2011 compared to a loss of Rs.46,755 lakhs in

Fiscal 2010.

Profit/ (Loss) after Taxation

Profit after taxation was Rs.969 lakhs in Fiscal 2011 compared to a loss of Rs.46,764 lakhs in

Fiscal 2010.


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OTHER OPERATING EXPENSES

Aircraft Variable Rentals

Aircraft Insurance and Other Insurance

Landing, Navigation and Other Airport Charges

Aircraft Maintenance (including Customs Duty and Freight, where applicable) :

Component Repairs, Recertification, Exchange, Consignment Fees and

Aircraft Overhaul

Lease of Aircraft Spares including Engine

Consumption of Stores and Spares

Provision for Spares

Obsolescence

Inflight and Other Pax Amenities

Communication Cost

Travelling and Subsistence

Rent

Rates and Taxes

Repairs and Maintenance

-

Leased Premises Electricity

Directors Sitting Fees

Provision for Bad and Doubtful Debts

Bad Debts Written off

Loss on scrapping of Aircraft Parts

Loss on scrapping of Fixed Assets other than Aircraft parts

Loss on sale of Fixed Assets other than Aircraft

Miscellaneous Expenses (Including Professional Fees, Audit Fees,Printing and Stationery,

Cargo Handling and Bank Charges etc.)


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Factor Inputs

Airfares in India are among the highest in the world. For instance, a typical Delhi-Bangalore

round trip costs Rs 18,000 - the same as it would from Delhi to Singapore.


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Labour

If regulations or industry policy provide protection to an industry, the value of protection may

be dissipated in poor productivity and higher-than-normal returns to labour and capital. Entry

limitations and capacity constraints have the potential to allow airlines to earn above normal

returns, which may be appropriated by shareholders or paid out in higher than normal costs

(including wages, salaries and working conditions).

Given the valuable contribution that aviation and tourism make to national welfare, it is

essential that the aviation market is globally competitive and functions in the most efficient

way. This means that the inputs that the industry depends on, such as labour and capital, must

also be available on an internationally competitive basis.

FuelPrices

ATF is the major cost for domestic carriers accounting for 30% of the total operating costs

in India, which is much higher than around 10-15% for airlines worldwide. The exorbitant sales

tax on the ATF, which increases the price of ATF, is the major reason for this higher share in

operating cost.

Capital

The relatively capital-intensive nature of the airline industry, combined with the fact that

airlines are generally regarded as being inherently risky investments, means that access to

large, well-functioning capital markets is an important issue for all airlines. The effects of these

restrictions may vary from country to country, but are likely to be greater for countries with

small domestic capital markets.


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Operating Costs

The regulatory system affects where,

how and when airlines can fly. Thus it

affects airlines ability to operate

efficient networks and their revenue.

To the extent that airlines cannot use

the least cost combinations of aircraft

types to carry passengers and freight,

the costs of operating existing

networks are higher than they

otherwise might be (technical inefficiency). Further, they may be prevented from flying the

optimum sized and configured network (allocative inefficiency). Thus, costs may be reduced as

airlines are able to operate the right aircraft at the right frequencies on an existing route.

Airlines, by changing the design of a network and increasing its size, may also be able to

decrease costs through economies of scale and scope.

Ownership and control

As airlines strive for greater efficiencies, they consider the benefits of consolidation. However,

the normal commercial process of acquisition and/or merger is not available due to restrictions

contained in bilateral agreements that are designed to ensure that ownership and control of

airlines remain with nationals of the countries where they are based.

Growth through merger or acquisition enables airlines to achieve economies scale and scope by

consolidating airline functions. The merger of two airlines, for example, may allow them to

consolidate their ground handling, maintenance, information technology and various

managerial functions.


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Airline Acquisition/Leasing Cost

Taking aircraft on lease is one of the preferred modes among the Indian carriers. However, this

has suddenly become costlier affair due to changes proposed in Union Budget 2004-05. The

budget proposes withdrawal of tax exemption granted to acquire aircraft or an aircraft engine

on lease prospectively from September 1, 2004. This has resulted in imposition of withholding

tax of 42% on leasing of aircraft. Impediment of this kind at a juncture when almost all, Indian

carriers are firming up their expansion plans especially through leasing of aircraft is a setback.

All carriers barring Jet Airways will feel the heat of the sudden withdrawal of exemption for

taking aircraft for lease as they have significant plan to expand the fleet capacity by leasing

route. This includes both state carriers like Air India (AI), Indian Airlines (IA), Alliance Air and

private carriers like Air Sahara, Air Deccan. As Jet Airways that has predominantly prefers

owning aircraft rather than going for leasing.

As tax exemption will not be available for lease agreements entered on or after April 1,

2005 the Indian carriers who have plans to take aircraft on lease have to sign agreement either

on or before the expiry date or they will have to bear additional cost burden. Alternatively,

taking aircraft on lease from a country with which India has double taxation treaty or getting

lease agreement signed in a third country could help avoid the tax on lease rental. This may not

be much helpful to state carriers and to some extent the private players also due to auditing/

accounting procedures.

As leasing route is the most preferred one for a new entrant, the Budget initiatives will prove

be a heavy deterrent as they will escalate the effective lease rental cost by almost 42%.


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Hit the road (or should we say the sky).

You know what fewer flights means, less demand for on-board and off-board staff. Thats right,

although its been happening for years, layoffs have been more common than not across the

industry. In the past, Delta Airlines, for example have cut as much as 30 percent of its

workforce.

Lighten the load.

You cant hear news about the airline industry without listening to mentions of fuel economy.

Airlines have taken extreme measures in some cases to trim a few tons. Several airlines have

limited their food and beverage offerings and switched from heavy metal accessories like

carts and trays to plastic and scheduled more direct flight paths. Even their attempts to

charge more for bags, has helped this cause. Travelers are carrying less luggage, which means

lighter baggage storage.

Some airlines have gotten creative with this cost-saving measure, replacing old carpet with

new, lightweight material and repainting with less paint. The Aircraft Interiors Middle

East reports that changing out carpet alone could amount to as much as 25 percent in weight

saving.


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Whats yours is mine.

Because all airlines are cutting back, several have joined other teams of airlines to share

resources. A conglomeration of airlines called SkyTeam has formed to allow airlines to share

cargo and passenger terminal facilities, integrate frequent flyer programs, consolidate sales, as

well as maintenance and administrative operations.

Bring on the technology.

In recent years the airline industry has quickly learned to adopt new technologies as a means

of streamlining the air travel process. The Air Transport Association has backed a Fast travel

initiative that leverages new technologies for every step of the travel process from checking in

to baggage tagging, boarding, and even baggage recovery. This shift has cut back on personnel

costs and significantly increased efficiency, which translates to big savings in the industry.

Think outside the box.

Innovation in the airline industry hasnt just come in the form of technology. Airlines have

worked to mitigate their problem with baggage loss, which costs the industry close to $3.8

billion a year. Baggage go-teams have been deployed throughout the industry that have

been trained to optimize the baggage handling process.


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Ask and you shall receive.

British Airlines asked members of its workforce to volunteer for furloughs or unpaid time off to

cut back on costs. Out 40,000 workers, 6,940 volunteered to take unpaid leave, potentially

saving the company 10 million per year.

Think you can stand it?

The notorious budget airline of Europe, Ryanair, proposed the idea of standing-room only

seating on some flights to maximize its aircraft caring capacity. While this endeavor does

nothing for fuel economy, it does allow the airline to pack in 30 percent more passengers and

slash costs by 20 percent.

Foe turned friend.

The slews of mergers will most likely keep on coming even as the economy takes a turn for the

better; the industrys expansion and contraction has become somewhat of a pattern

throughout the decades. Since deregulation of the 1970s the airline carrier pool has diminished

from 20 down to about half and, as some experts see it, could get as small as four or five

airlines.

Other cost reduction ideas

Cash management

1. Pay your bills only when they are due.

2. Get your income as soon as possible.

1. Pay no bill before its time. Don't pay any bills until they're due. See who has a late charge,

and who doesn't. Send checks out on Friday to take advantage of the weekend "float."

2. Exercise dormant lines of credit. Frequently business owners set up lines of credit they don't

use. The bank may drop your line of credit if it is not used for a certain period of time, so be

sure to check their use requirements. If there is an annual cost, such as 1%, many business

owners consider dropping a line of credit. But remember the rule of banking: If you really need

the money, you probably can't qualify for the loan.


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3. If you don't have a line of credit, set one up now. Check around for competitive rates. It's a

lot cheaper than using credit cards if you're really in a cash flow pinch.

4. Closely monitor your three sources of cash:

- Appraisals in process, not yet completed

- Appraisals billed out, but not yet collected

- Paid billings: cash on hand

5. Complete and bill out appraisals as fast as possible. The sooner they're billed, the sooner

they'll be paid. We're all tempted to "let the work fill up the time available." But, it delays

payment of your bill. If they don't have the appraisal, they won't pay the bill.

6. Give your associate appraisers a higher fee split if they're willing to wait to be paid until

you're paid for appraisals. This policy can be a substantial help to cash flow problems as the

highest percent of expenses is appraisal labor.

7. Be very aggressive with past-due accounts, particularly non-institutional companies, such as

mortgage brokers. With many mortgage brokers expected to go out of business, and both

mortgage bankers and brokers having cash flow problems, let them be late paying someone

else, not you. In collections, the "squeaky wheel gets the grease." Call every day if necessary.

8. Get interest on your money by setting up a "sweeps" account or interest bearing checking

account, and doing daily deposits. Even if it's only two or three percent interest, it's better thannothing.

9. Get as many pre-payment or COD's as possible. Offer a discount, if necessary. Require pre-

payment from private clients, or business clients that may cause payment problems. If they

won't pre-pay or COD, turn down the work. Don't work for free.

Rent - office and storage

10. Renegotiate your lease to a lower rent, or a temporary lower rent while business is slow. If

office vacancies are high, your landlord will probably prefer reduced rent to no rent.

11. Sublet unused office space to appraisers or non-appraisers. Or, move out of your larger

office space to a smaller sublet office. See the June, 1994 issue's article on shared office space.


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12. If you need to move or downsize to a smaller office, but have a lease, work with your

landlord. Maybe he or she will let you sublease, make a partial payment of the rest of your

lease, or move to a smaller space. In most parts of the country, the office market is not doing

well, and landlords are willing to negotiate. Negotiate with the landlord for some type of

compensation for phone and electrical improvements you have made and paid for, but will

have to leave behind when you move.

13. Move "back home" and work out of the garage, spare bedroom, or even the dining room

table. If you think it's too cramped, consider it only temporary until business picks up again.

14. Shop around for low-cost storage space. We have to save our files for at least 5 years, and

many of us save them for much longer. What to keep and throw out in files is an individual

decision, but you can shop for a lower storage cost.

15. Get rid of excess stored stuff, such as old office furniture. Sell it or give it away. Don't pay

storage costs for things you really don't need. Don't be a packrat.

Pricing

16. Keep close track of your competitor's costs. Don't underbid or lose work because you

overbid. When fees are changing, don't get left behind and lose valuable assignments fromoverbidding, or income from underbidding.

17. Don't offer lower prices to a client that isn't price sensitive. Why give away your profits? Not

everyone gives assignments to the low bidder. Some don't even do competitive bidding.

18. Know your costs on appraisals. The high fee jobs may not be the most profitable. It may be

more profitable to set up referral alliances with appraisers in other geographic areas, rather

than spend the time traveling and doing extra research on an area you're not familiar with.

Dues and publications

19. Carefully review each organization where you pay dues. Do you really participate, or do you

send in dues because "you always have." You can always rejoin later, when business picks up if


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you feel guilty about dropping out.

20. Review the publications you subscribe to. If a publication doesn't really help you in your

business, consider not renewing.

Personnel:

21. Cut back principals' salaries. Pay yourself last, after paying all other expenses. Although this

may seem obvious, many companies have developed serious financial problems because the

owners kept taking out large salaries.

22. "Lease" your employees. Instead of laying off an experienced secretary, lease him or her to

another company until business picks up again.

23. Use temporary help whenever possible when your business substantially increases. That's

how the mortgage lending industry handled the 1991 to 1993 substantial increases in lending

volumes. They first let go the temps, then the permanent employees.

24. Use part-time support staff. They don't require benefits and usually have more flexible

hours. Laying off a part-timer, or cutting back their hours, is much easier than a long-term loyal,

full-time employee.

25. Have a cost cutting brainstorming session with your associates and support staff. If you're

working alone, set up a lunch with your accountant or other appraisal business owners to swap

ideas. You'll get many ideas you've never thought about before.

26. Have one person attend a seminar, and then later "show and tell" the rest of your staff. For

example, we all want to find out about the new USPAP changes, but the seminars are

expensive. Just send one person, who gives a "mini-seminar" to your other associates and

yourself.

27. Attend only local seminars to eliminate travel costs. If there's an out-of-town seminar you

want to take, call the sponsor and see if it will be offered locally. Or see if you can purchase

audio cassettes or video tapes.

28. Use an outside payroll service such as Paychex or ADP to cut bookkeeping payroll costs. Or,

do it yourself by using a simple software program like Quickbooks. Don't use a CPA to do your

bookkeeping.


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29. Broaden staff responsibilities. For example, instead of paying an outside bookkeeper, have

your secretary do it. If you have to lay off a full-time secretary because your work has dropped,

consider letting a less experienced associate appraiser do part-time clerical work. At least they'll

have some income. Instead of having outside firms do janitorial and delivery services, have your

employees do it. It's better than getting laid off, or sitting around worrying about getting laid

off.

30. Cut your FICA and FUTA by setting up non-cash compensation, such as a "cafeteria" benefits

plan with such benefits as health insurance and paid time off.

31. Use college interns or co-op students for research, setting up databases, etc. They work for

credit or a low salary on a short term basis and can work on specific projects, or on general

research.

32. Get free or low cost consulting from a local college business school's small business

consulting programs, or the SBA's SCORE (Senior Corps of Retired Executives) program. They

can give you advice on such topics as marketing, collections, and cost accounting.

Insurance:

33. Be sure you're not overpaying for workers compensation. How are your appraisersclassified? They are relatively low risk for a claim and should be classified as real estate agents

or some other category, rather than as much more expensive inspectors. If your insurance

company insists on classifying them in a high rate category, change insurers. If this year's

workers comp is based on last year's employment, be sure to notify your insurer if this year's

payroll is expected to be lower.

34. If you have high production typists, be sure to minimize repetitive stress to avoid workers

comp rate increases, if one of them becomes disabled. Contact your workers comp carrier formore information.

35. Look at your auto insurance coverage. Consider dropping collision on older vehicles. If the

car is only worth $1,500, why pay $200 per year extra for collision?

36. Raise deductibles on such coverage as auto collision, disability, property/casualty, and


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liability insurance. For example, have disability insurance "kick in" after 90 days instead of 30

days.

37. Evaluate all your insurance policies for their risk/benefit, and decide which ones you think

you will really need. Don't over insure.

Taxes:

38. Don't overpay your income tax quarterlies. If you anticipate that your taxable income will

drop this year, don't pay taxes based on last year's income. Work with your accountant to pay

quarterlies based on a more accurate estimate. If you've already overpaid your quarterlies, ask

your accountant about a quick refund, using Forms 4466 and 1138.

39. Close to year-end, schedule a tax-planning meeting with your accountant to shift income

and expenses. For example, shift income into the next year to decrease this year's taxes.

Office supplies:

40. Shop for the best prices. Don't pay too much attention to percent discount. Look at the

bottom line. No one pays full retail. Purchasing supplies in bulk may be worthwhile.

41. Use office warehouse companies likeO

ffice Club. They usually offer the lowest prices. Manywill deliver. Don't forget discount stores like Price Club, Wal-Mart, and Costco. Many carry

some of the most-purchased office supplies, like paper, pens, and laser jet cartridges. You don't

always need to buy brand names.

42. Keep close track of inventory so you don't have to pay someone to "run over" to the nearby

high-priced office supply store.

43. Lock the supply cabinet. Yes, this will cause grumbling. Explain that it will keep it neater, and

you'll be less likely run out of supplies.44. Use fax instead of U.S. mail whenever possible. It's cheaper and faster.

45. Use the back side of old copies for rough drafts to cut your paper costs.

46. Cut "post-it" pads into smaller sizes to use for page markers. Or, have your photo processor

do it.


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Equipment and phones:

47. Sell or donate excess office furniture and equipment. Storage space is expensive. You can

sell it to employees, the public, or the vendor (on consignment). Donate it to local charities or

schools.

48. When leasing equipment, get an option to cancel due to closure or consolidation. Don't get

an "evergreen clause", where the contract always continues unless you give 30 days notice.

They are difficult to cancel, as the expiration date is hard to monitor.

49. Renegotiate your equipment leases. For example, change to a smaller copier. Buy shorter

maintenance agreements, so that, for example, if your copier volume is lowered, you can

decrease maintenance. See if you really need all your service contracts. Maybe its better to pay

for repairs on an ad hoc basis.

50. Reduce phone lines. If you have fewer staff, you need fewer phone lines. Cancel some of

the optional features you don't really need.

51. Make long distance calls and fax during off peak hours. If you're on the East Coast, make

West Coast calls after 5 P.M., when it's only 2 P.M. on the West Coast. Conversely, on the West

Coast, make your East Coast calls before 8 A.M.

Conclusion

Admitting that it intends retrenching excess staff as a part of its endeavor to perk up the

company's financial health, Jet Airways also clarified that reports making rounds about massive

job-cuts were more of an overstatement.

A Jet Airways spokesperson, said: "Retrenchment is the last resort for us. We have excess staff.

But reports appearing in the media about huge layoffs are grossly overstated."

Though the spokesperson stopped short of revealing the number of lay-offs planned by the

company, it was stated that the trimming down of excessive workforce was a much-required

measure, given the financial crisis the recession-hit company is undergoing.


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In its attempts to boost revenue, Jet Airways has already leased out some of its planes to

foreign carriers. In addition, it has initiated a new 'no-frills, low-fare' service - Jet Airways

Konnect - to enticing travelers with economical tickets.

Rationalizing its retrenchment decision, Jet mentioned the adverse impact the global slowdown

has had on the aviation sector, and talked of other cost-cutting measures it had executed - like

a wide-ranging cost-restructuring program; pulling out of operations on extravagant routes; and

downscaling of some international capacity.

Among other cost-reduction measures undertaken are - stalling recruitment and capital

expenditure; snipping executive perks; temporarily reducing management salaries; and

shuttering international ticketing offices and crew bases on rented property.

Reference:

Mr.G.Ravichandran General Manager, Airport Authority of India Chennai.

Mr.Bharat Yadav Business Development Strategist, Jet Airways, Chennai.

Kir Fma Final

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