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Thursday, Oct 16, 2008
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National

Layoff casts its shadow over aviation expo

Vinay Kumar

We are responsible to our shareholders and we have to earn profits: Goyal
We support whatever steps airlines are taking to sustain themselves: Patel

HYDERABAD: ‘India Aviation 2008’, the country’s first-ever international civil aviation exhibition and conference, opened here on Wednesday amid growing concerns at the sector’s financial health. It is facing a downturn globally with mounting losses, low traffic and high operational costs.

The mega event, which brought to the old Begumpet airport global aviation companies and aircraft manufacturers Boeing and Airbus Industrie, coincided with the largest ever layoff in the country’s civil aviation industry.

The services of 900-1,000 unconfirmed staffers, mostly probationers, of the country’s largest private carrier, Jet Airways, promoted by NRI businessman Naresh Goyal, have been terminated. He told journalists here that those being asked to leave belonged to all departments including engineering, cabin crew and ground staff. The move follows the newly forged synergy between Jet Airways and its business rival Kingfisher Airlines of Vijay Mallya. Earlier, Kingfisher sacked about 300 employees.

“We laid off some employees, now they [Jet] too have done so. We are all in the same boat. Both I and Mr. Goyal have stressed that ours is a purely operational alliance. There is no equity swap here,” Mr. Mallya said emerging from a meeting of airline chiefs that preceded the formal inauguration of the expo. Civil Aviation Minister Praful Patel attended the meeting.

Refusing to go into details, Mr. Mallya said: “We will do whatever it takes to be economically healthy. We have to synergise and become profitable.”

Mr. Goyal too stressed that all airlines were eager to protect their interests. He said a bigger alliance was started in Europe, where British Airways, Air France and Lufthansa came together. “It is the first time that we are seeing such an alliance in India.

Citing his acquisition of Air Sahara, the Jet Airways chief said that in view of excess capacity, routes rationalisation and cost cutdown were bound to happen.

Mr. Goyal said fleet size and market share were of little consequence as big carriers in the U.S. with nearly a thousand aircraft had gone bankrupt. “We are only 15 years old and Kingfisher is barely three years old. Our aim is not to have a huge fleet. That is not the answer to achieve profitability of the company. We are responsible to our shareholders and we have to earn profits.”

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