Jet Airways cutting junior pilot pay to trim costs

Jet Airways, India's second-largest airline by market share, plans to slash pay of dozens of its junior pilots by as much as 50 percent in a cost-cutting move that could impact up to 400 pilots, according to two sources and letters seen by Reuters.

The airline, in letters sent to pilots earlier this month, has proposed they either take 30-50 percent salary and stipend cuts, or quit, saying it was forced to take such steps as it was "intensely focused on fleet and network rationalisation".

The measures are to be implemented from Aug. 1.

"Certain developments in the market, including that of the Gulf region, as well as our continued efforts to enhance internal efficiencies, has resulted in the review of our network, fleet and crew utilisation," a Jet spokesman said in an emailed statement.

The spokesman said it has made some interim changes to its crew work patterns which will be reviewed in future, in line with network growth.

The sources asked not to be named due to the sensitivity of the matter.

Jet Airways has struggled to keep a tight lid on costs in one of the world's fastest-growing aviation markets where competition from low-cost carriers such as InterGlobe Aviation's IndiGo and SpiceJet is on the rise and is putting it under pressure.

While India's domestic passenger traffic rose 22 percent in the fiscal year ended March 31, Jet Airways saw only 5 percent growth and its market share fell to 18 percent at the end of June from about 23 percent two years ago, industry data showed.

The Indian airline, partly-owned by Etihad Airways of the United Arab Emirates, is also facing headwinds in international markets due to economic weakness in the oil-rich Gulf region that has affected air travel and is hurting its revenues.

In two letters written by the company to pilots and reviewed by Reuters, the airline told the pilots to accept the new lower salary by end of July, or look for other opportunities.