Aviation Chaos Strikes India

Posted by: Bruce Einhorn on September 8, 2009

In a country notorious for its lousy airlines, Jet Airways has always stood out as India’s one world-class carrier. Unlike some other Indian airlines, Jet has new planes, tasty food, a good safety record, nice service and a great reputation. (My former colleague, Manjeet Kripalani, posted on the Eye on Asia blog last year about how lovely it is to fly on Jet.) Ideally, all that attention to getting things right would translate into a profitable business for Jet. But the airline has been struggling, losing $97 million in the year ended March 2009 on sales of $2.3 billion. That was the second year in a row of losses for Jet.

Today Jet suffered through probably its worst day ever as pilots angry with management staged a strike that forced Jet to cancel 115 flights. According to this story in the Economic Times of India, “chaos prevailed” in airports as a result of the strike. Jet issued a statement saying it had been “in a conciliation process with the pilots” and the walkout therefore was against Indian law. The government, meanwhile, issued a statement in an attempt to assure Indians it was looking after their best interest. Jet executives have “been directed to put in place a full refund mechanism without any deduction - on passenger request,” the Civil Aviation Ministry said. “They have also been asked to adopt a method of combination/re-scheduling of flights for smooth transfer of passengers. The Ministry has directed the management to ensure full facilitation of passengers and their amenities. Jet Airways has been asked to minimize the inconvenience that is being caused to the traveling public.”

But pilots and passengers aren’t the only ones angry with Jet these days. On news of the pilots’ walkout, the company’s stock price briefly plunged but then recovered, thanks in part to news that Jet is looking at selling some of its planes. Still, anyone who invested in Jet at the time of its much-anticipated IPO in early 2005 is hurting. The stock debuted at 1100 rupees in March of that year but now trades at 259. During that same period, the benchmark Sensex index increased more than 230%.

Wednesday update: Jet Airways management has ratched up the dispute another notch, firing another three pilots in addition to the two it had already sacked in July for joining a new union representing Jet pilots. How determined is Jet to bust this new union? The Times of India quotes airline founder Naresh Goyal saying “I will not hesitate to close down the airline if the people who work for it no longer believe in its philosophy of discipline, guest care, safety and punctuality that has taken Jet where it is today.”

Reader Comments

Eric Pereira

September 8, 2009 10:31 PM

This is a creation of Both Management and The Pilots. We call a INDIA as a Democracy then why the Management is afraid of a union , arn't we in India not have the Right to Form one I blame the Jet Management for this Problem. The Pilots are also responsible for putting the Public at large who have made Jet as We call it A World Class entity. I HOPE THIS IS ALL RESOLVED and every thing comes back to NORMAL.

No suprise

September 8, 2009 10:53 PM

What can you expect from India, a chaotic country itself.

Sameer

September 9, 2009 6:34 AM

its a problem created by nares goyel only. he can not fire pilots this way. he has to put his hand submissive.

Zayed

September 9, 2009 11:23 PM

huh..Bcoz of this MF pilots i cudn meet my gf...Go to hell

wrongonallfronts

September 10, 2009 2:57 AM

indians always do things for the wrong reasons and ends up for the wrong reasons. always.

how india can be a developed country is beyond my comprehension.

anooj

September 10, 2009 4:42 AM

This is rubbish. The airline must not punish the people like this. all the problems can b settled by discussing only. one fine day ur calling a strike. this is unfair. what if v pax decide not 2 fly vth u anymore.jet is one of my favorite airline nd and it is painful to c such a situation in it.

Murugan

September 10, 2009 6:42 AM

Regarding Jet Pilot agitation.
It is wrong time to form such unions. hence all the problems.
Though forming union is a basic right of a Indian, it should be at a right time and at right place. I am very sorry for the pilots who do not able to feel the difficulties of the industry.
It shows that pilot community is very much concerned about their ego and power. They are not able to understand the consequencies and problems to the valuable passengers and lower staffs of the company. This type of people is always threat to India's developement

Joekill

September 15, 2009 1:16 PM

Jet Pilots are full of bull%$#&. Work and trade union rights should exist only for common labour and worker class employee, NOT for pilots who earn 3 lakhs a month. I'm so glad Jet fired those guys, and shouldn't hesistate to can some more if they get out of line.

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Bloomberg Businessweek’s team of Asia reporters brings you the latest insights on business, politics, technology and culture from some of the world’s biggest and fastest-growing economies.

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