Case Study Jet Airways
Private Limited was a reputed private Lorene In India having an average fleet age of 4. 45 years. Jet Airways covers 63 destinations spanning the length and breadth of India and beyond, including New York, Toronto, Brussels, London, Singapore, Hong Kong, Koala Lump, Colombo, Bangkok, Katmandu, Dacha, Kuwait, Bahrain, Muscat, Doth, Riyadh, Jessed, ABA Dhabi and Dublin. The Airline carried 1. 28 million passengers out of 408 million passengers carried by the whole airlines industry.
Jet Airways had borrowed about $800 million to finance a new fleet of aircrafts. Jet Airways was poised to profit from an expected extension of flying rights throughout Asia. Colombo, Sir Lank, was the first such international destination.
Flights to Bangladesh and Nepal followed soon after. Over the next few years Jet Airways established Itself as a leading player In India, becoming a case study for In-flight excellence. Possibly excited by this euphoria, industry Insiders say, the management made its first big gamble by buying Air Sahara in 2006.
Apart from Jet Airways and Air India, Air Sahara was among the only three Indian carriers that flew abroad during that period. Nearest Goal moved In to buy Sahara a year later for RSI 1,450 cores.
Jet Airways fulfilled its desire to be the only “private” Indian carrier to fly abroad in 2006. Acquiring Sahara meant a huge drain on Jet Airway’s resources, both on financial and management fronts. All this happened at a time when the concept of low-cost carriers was completing two years In India. The domestic aviation market was growing at 30-40% and players like Air Decca were challenging the full service carriers.
Crisis 1: 1900 Employees Sacked and Then Reinstated Jet Already Ana Eden constantly Incurring losses since 2 / PUB “Buying Sandra was a gig strategic mistake by Jet Airways. This happened at a time when Jet Airways was growing aggressively on the international front and facing tremendous competition in local market’, said the India head of the Centre for Asia Pacific Aviation. The first sign of real trouble in Jet Airways became apparent in 2008 when Nearest Goal entered into an operational tie-up with arch rival Visas Mall’s Kingfisher.
Reinstatement AT 1 YOU employees Jet Airways chairman Nearest Goal, in a dramatic press conference late on Thursday night, said his airline would take back each and every one of the 1,900 sacked Jet Airways employees because he understood their pain and “would not be able to sleep peacefully’ if he did not reverse the retrenchments.
Source: Media Dot. Cot 19th “l apologize for all the agony that you went through,” Mr. Punjabi said, his statements erected at the retrenched staff. The evolve face caught everyone by surprise.
Jet Airways Chairman Nearest Goal reinstated the employees a day later saying that he was not aware of these sackings. “l was not there when this decision was taken.
I came to know about it later. ” “l have not been able to sleep all night. I apologize for what has happened,” an emotional Jet Airways Chairman Nearest Goal told reporters at a late night press meet. “l request all of you to start work from tomorrow morning,” he said. Punjabi said his conscience did not allow economic consideration to be the reason or sacking employees. “When I saw the tears rolling down some of the workers face I was moved.
I cannot see you all unhappy. My workers are like my family members,” he said. “It is my personal decision as father of the family’. The company had said it was forced to trim staff to cut its losses but Punjabi claimed that he had not been consulted before the Jet Airways senior management ordered the retrenchment. This statement was contradictory to the earlier ones and puzzled quite a few analysts.
The Indian aviation industry was going through a tough phase and experts felt that it as in the interest of the company to retrench employees to remain competitive.
Experts largely felt that Punjabi had capitulated under pressure from external parties while others felt that all may not be well with the organizational communication mechanisms at Jet Airways. “While the mishandling of the Jet Airways sacking and reinstatement of 1 ,900 employees was an HER and PR disaster, the larger implications of what happened are also worth considering. It is not Just that the chairman of Indian’s most successful airline became the butt of Jokes, it is also a question of what he knew, when he knew t, and who did the bungling. – Insulin Bargain, Columnist, Business Standard, October, 2008. “The sackings were completely illegal.
There was no notice nor was government’s permission taken to sack 1800 employees. Perhaps they realized their folly and called to take tense employees Dacca K. I en matter would nave lane In ten court. ” – And Pajama, Labor lawyer, IS Josh & Co. In October 2008 Crisis 2: The Pilots Revolt Formation of the NAG The retrenchment and then the reinstatement saga had bred insecurity among the employees.
The airline pilots did not have any union and being contract employees loud be shown the door anytime.
It was reasoned that the current financial crisis may badly affect the lives of the younger pilots who may be laid off any time as the mass sacking had indicated. This led to the formation of the National Aviators Guild the NAG. On July 24 2009, the NAG – National Aviators Guild- was registered by the Regional Labor Commissioner. Captain Sam Thomas and one of his colleagues played a significant role in the formation of the Union.
The Email Announcing the Termination of Service On July 31 , 2009, the two senior pilots of Jet Airways, who were both office-bearers of he newly formed NAG, were dismissed.
They were sent a single-line e-mail stating that their services were terminated with immediate effect and no reasons were assigned for the same. Management alleged that the two captains went around compelling pilots into signing the union membership form. The pilots on their part maintained that their request for discussion and representations were ignored by the management. According to the pilots their appeals fell on deaf ears; NAG issued a strike notice on August 24, 2009.
Jet Airway’s Executive Director Sartor Data stated that the reason behind sacking lots were internal disciplinary issues and the lawyers were duly consulted before the sacking of pilots. The pilots had gone on mass leave without making any attempt to talk with management, he said, adding, that the move resulted in disruption of operations and caused huge losses to Jet Airways. On his part, Thomas, the Joint secretary of NAG said, any sacked employee deserved an explanation and he was not given any for his retrenchment. By not officially calling it a strike, Thomas said the pilots were still within the law.
What does the law say The right to form a Union is the essence of any socialist state and part from the Constitution; it has also been codified in the Trade Union Act, 1926. The crucial point is that it uses the word ’employee’ rather than Workmen’.
The management obtained an order from the Bombay High Court by virtue of sections 22 Ana 23 AT ten Insularly Delouses Act restraining ten ANA Trot stroking. Further, since the matter was pending before the Labor Commissioner, it was asked that the dispute be resolved via that medium as soon as possible.
It was strongly rumored that the Centre was planning to invoke the Essential Services Maintenance Act – a law used in an extremely rare situation to compel the pilots to fly or else face criminal prosecution. Elsewhere it was reported that the Centre and the GAGA were planning to move an Amendment to the Industrial Disputes Act, 1947 to remove airline pilots from the definition of workmen from the Act. This could ensure that they can never legally form unions and go on strikes. Discussions and Negotiations Talks between the pilots and the management failed to resolve the crisis and the deadlock continued.
The striking pilots continuously demanded the re-misstatement of their sacked colleagues. Meanwhile news reports filtered in that pilots of Jet Airways had skipped a scheduled meeting with the management of the airline as the confusion entered its third day. According to a news report, pilots were quoted as saying that they were not informed about the meeting in advance. The meeting was to be mediated by the Central Labor commissioner. The two parties were also scheduled to meet the Labor Commissioner in Iambi where a case relating to sacking of the two senior pilots was pending.
According to reports, the pilots union was unwilling to meet the management and held a meeting to chart out future course of action.
Cap Sam Thomas, Joint General Secretary of National Aviators Guild, which was spearheading the agitation, claimed that overall 500 pilots have reported sick. “There are no talks so far. We have not got any invite from the management side showing their willingness to talk to us,” he claimed. The pilots maintained that they would not return to work until the management took back four colleagues who were sacked.
Two of them were allegedly shown the door 45 days ago for forming a union – the National Aviators Guild – while the other two were sacked as the protest action began. The four-day strike had led to the inoculation of nearly 700 flights, costing hardships to over 28,000 passengers.
The stalemate between the striking pilots of the Jet Airways and its management failed to come to an end even on the fourth day as talks held between the two factions remained inconclusive. The next round of discussion was expected to take place on Saturday in Iambi, said television reports on Friday evening.
Resolution talks between agitating Jet Airways pilots and the airline management were held in the national capital before the Chief Labor Commissioner to break the deadlock that has severely disrupted flights across the country. Besides Chief Labor Commissioner S K Payday, the talks were reportedly being attended by Jet Airways executive director Sartor Data, CEO Hafiz All and head of operation Captain Moan. The pilots’ body National Aviators Guild (NAG) was being represented by its president Captain Garish Sushi and Captain Sam Thomas.
I en cancellation meeting unaware ten auspices AT ten Lour commissioner on August 31 did not produce the desired result and the management was asked to furnish the reasons for the sacking of the two pilots by September 7. They failed to comply and the Labor Commissioner fixed the next meeting for September 14. A few days later Jet Airways terminated the services of a few more senior captains and also obtained a Contempt of Court order from Iambi High Court, on September 9, 2009. This move actually firmed up the determination of the pilots to keep close ranks in support of their dismissed colleagues.
Punjabi further incensed the pilots association when he referred to the pilots as terrorists; that they were holding the country to ransom and announced that he would bring in foreign pilots to cope with the situation. “l am open to meeting and talking to the pilots.
I will be more than happy to meet them. But they cannot harass the passengers,”. “We wont tolerate such blackmail. The livelihood of more than 30,000 employees of Jet Airways is at stake,” the airline chief said. The NAG withdrew the strike notice on the evening of September 7, 2009 but the members were agitated that the two pilots had not been reinstated.
More than 300 of them reported sick. The only demand of the pilots’ union was to reinstate the two pilots. Instead, the management used a battery of high-profile lawyers to obtain a stay from the Iambi High Court. Meanwhile, air travelers were facing a harrowing time as the airline cancelled over 00 flights. Jet Airways cancelled 21 international flights operating on South East Asia sector to Bangkok, Hong Kong and Singapore.
The airlines services to Gulf countries, the US and Europe were also badly affected.
In Delhi, about 15 flights remained cancelled by virtue of flight cancellations and unavailability in other flights. “Due to continued pilot agitation, disruptions are expected on the Jet Airways network and consequently, certain flights have been cancelled. On disrupted flights, guests will get full refund or they can reissue/rebook flights without any penalty,” a Jet Airways spokesperson said. Jet Airways is endeavoring to make alternative arrangements on other airlines wherever possible and the airport teams of the airlines will assist its guests to the fullest extent”, she said.
The airlines also tried to accommodate its passengers in its low-cost arm Jet elite. The airlines management combined 12 Jet Airways flights with Jet elite. The NAG at the same time filed petitions in the Achaean High Court against Jet Airways on the hiring of expatriates for the Job. On September 10, a public interest case was filed in Achaean High Court, highlighting the flight safety issues in the reoccurred for issuing permits to foreign pilots, who get preferential treatment over Indian pilots. I en Negotiations Director-General of Civil Aviation had quietly shown his mettle.
When the Jet Airways management went for indirect support, he stood firm by remaining neutral.
At the same time, he came down heavily on airlines exploiting the situation by charging very high fares. The management decision to refuse to take back two pilots who were sacked cost the company almost RSI 15 core a day. Nine-hour-long negotiations between the management of Jet Airways and the pilots of NAG ended in a deadlock with the management agreeing to reinstate the four sacked pilots but with a stiff rider: dissolve the union and form an association.
The condition put forward by the management was not acceptable to the pilots. Even as members of the pilots’ union went into a huddle to discuss the offer late in the evening, the airline, which operated 365 domestic and 74 international flights daily, was forced to cancel over 281 flights including 21 international flights. Finally, a draft was worked out late night between Congress leader Sandy Nirvana, representatives of the pilots and Jet Airways Chairman Nearest Goal.
The management agreed to reinstate the sacked pilots on the condition that it would reconsider the wisdom of a union.
Earlier in the evening, after a meeting with the Jet Airways management led by Executive Director Sartor Data in Hotel Tahiti in Iambi, NAG President Garish Sushi and the chief negotiator for the pilots had said: “I would pray to God that we start flying today itself. ” The negotiations ended with the formation of a grievance committee consisting of both pilots and administration members to hear such cases. Under the agreement, the pilots decided to Join duty with immediate effect. It was decided that a committee to look into the coordination between the pilots and the management would be formed.
The committee would work under the Central Labor Commissioner. Normal flight operations of Jet Airways resumed Sunday after the airline’s pilots decided late Saturday to end their five day old agitation following successful talks with the management, the airline said. Newspaper reports showed Jet Airways ground staff holding yellow roses presented by the management as a goodwill gesture at the city airport in Iambi on September 1 1, 2009. Exhibit 1: Shari Nearest Goal. The Man, the Leader.
.. He is the kind of man who plays his cards close. Take this time for instance when his A-team woke up one June morning in 2005 at their homes in Iambi.
Business papers were full of Punjabi decision to order 20 new wide bodied aircraft for Jet Airways at the Paris air show. All of it, the newspapers reported, was to be delivered and inducted into the airline’s fleet over 18 months.
But nobody at the airline? not not coming. ten alerts on nun ‘s Dora, cautiously NOAA?Ana a clue tens was Some speculate that he did this as he sensed that Visas Mall’s Kingfisher Airlines loud be a force to reckon with in the years to come. He wanted the first mover advantage, never mind how impossible the task of inducting these planes into the fleet seemed.