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National

Civil aviation sector begins to feel the pinch

Vinay Kumar

High jet fuel prices, high operational costs and lower passenger volumes are taking their toll

NEW DELHI: Civil aviation and tourism sectors in the country are beginning to feel the heat of the economic slowdown in the area of new jobs.

The civil aviation sector, in fact, was on the path of high growth for a while. But the high jet fuel prices, high operational costs, over capacity and lower volumes of passengers have now begun to tell on the airlines.

Private carrier Jet Airways last month announced 1900 job cuts of cabin crew and other staff. Peeved by the sudden move, Civil Aviation Minister Praful Patel made his displeasure known. The UPA government too did not want a controversy at a time when elections were round the corner. Jet Chairman Naresh Goyal had to reinstate all those whose services were terminated.

The government came out with the assurance that there would not be any lay offs in the sector.

The civil aviation sector, which ran up losses to the tune of Rs. 4000 crores last year, appears set to see the figure mount to nearly Rs. 9000 crores this year, industry sources say.

However, they feel that the dismal scenario will not last. They are confident that the sector will return to its growth path in about a year’s time, notwithstanding the fact that all carriers are going slow on their fleet induction programme, rationalising their routes and curtailing international operations.

Jet’s no-frills arm, JetLite, had earlier done away with the services of nearly 200 to 300 employees.

Vijay Mallya’s Kingfisher had also sacked 300 employees. Jet acquired Air Sahara and Kingfisher bagged Air Deccan. Both the carriers are still finding it difficult to achieve a smooth and complete synergy in their operations in the post-acquisition period.

About a fortnight ago, Kingfisher announced massive cuts in the salaries of trainee co-pilots. Other airlines, sources say, are also looking at slashing the perks of their top managerial staff.

On the other hand, public sector Air India is in the process of filling up as many as 68 vacancies at the level of general managers in several areas of its operations like engineering, commercial, finance and personnel, informed sources said.

The public sector carrier has already prepared a list of those eligible for promotion as general managers and the process would be completed soon, sources said.

Air India and Indian Airlines merged more than a year ago to form the holding company National Aviation Company of India Limited (NACIL) and retained the brand name Air India.

The company is now working overtime to achieve smooth transition and complete the integration process.

Rationalisation

“The stress is more on rationalisation in all areas of operation of airlines,” an industry source said.

“Several unproductive routes in the domestic sector have been given up and regional connectivity comes second in order of preference now. Airlines are now looking to retain their permanent employees, delay induction of new aircraft and find ways of cutting costs without compromising on safety and service. How that can be best achieved is turning out to be an engrossing exercise. There is hope that this downturn will last only for a year or so.”

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