Flying low

The pilots of Jet Airways will be returning to work after ending what the company’s management called a ‘simulated’ strike. But the episode has raised questions that may not be settled with the end of the strike itself. The airline faces additional losses — some have put it at as high as Rs 200 crore for five days in lost revenues — besides taking a beating on its brand value. Passengers will have less faith in the reliability of India’s leading private airline. The strike also highlights the fragility of labour relations — last year, the airline announced layoffs of over 1,000 employees, but was forced to backtrack after government intervention, underscoring the political sensitivities that prevail during an economic slowdown. The airline’s pilots have agreed not to unionize, but plan to be part of a committee along with the management that will address labour-related issues in the future. The company’s stock price fell as a result of the strike — which made shareholders of the company even unhappier — though the price did recover as the end of the strike came nearer. But Jet Airways’ shares now trade at just around Rs 250, compared to Rs 1,100 when the stock was first listed on the exchanges. The losses of the company, and of the others, including the government-owned carriers, are not likely to be any less in the next couple of years at least; is it possible that the current business model of the airline industry as a whole is flawed and will have to be rethought?
14/09/09 The Telegraph

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Categories: Indian Aviation- In General Sep 2009, Jet Airways Sep 2009