Air India considering fare cut, Jet to slash salaries (Lead)

November 24th, 2008 - 9:12 pm ICT by IANS  

New Delhi, Nov 24 (IANS) State-owned carrier Air India is considering a fare cut and is likely to make an announcement soon, but private airlines Jet Airways and Kingfisher are in no mood to follow suit, with Jet even working out on a salary cut of its pilots.With recession eating into its bottomline, Jet Airways is likely to announce a 20 percent cut in the salaries of its pilots, engineers and some other staff. An announcement to this effect is expected soon.

According to people familiar with the development, Jet’s pilots and engineers have expressed their opposition to a salary cut and are considering their response.

The airline employs around 13,200 personnel, of whom around 2,000 draw salaries in the bracket of Rs.100,000-plus a month. These officials comprise mainly pilots and maintenance engineers.

According to an Air India official, the carrier could reduce its fares by 10-12 percent some time in December following a cut in avitation turbine fuel (ATF) surcharge. The airline is contemplating fare cut following a request from Civil Aviation Minister Praful Patel Saturday.

“The fare cut would be done taking into account losses and expenses. You can expect an announcement soon,” an Air India official told IANS.

Patel said at the Hindustan Times Leadership Summit here Nov 22 that airlines ought to cut fares because of falling ATF prices.

“Now fuel prices have come down. You must match it with the perception or else you’ll lose people’s sympathy,” Patel, flanked by Jet Airways chairman Naresh Goyal and Kingfisher Airlines chief Vijay Mallya, had said.

State-run oil companies slashed ATF prices by 12 percent Nov 15, bringing down the price to Rs.39,767 per kilolitre from Rs.41,417 per kilolitre. With this price cut, the ATF or jet fuel prices are at par with levels that prevailed in September last year.

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