Jet Airways To Stop Hiring Foreign Pilots

Wednesday, 23rd May 2012 at 11:38am

Jet Airways announced its plans to stop supplying on-flight meals from several international airport and made its decision to not hire foreign pilots anymore. These measures were taken by the airline to reduce expenses, since the value of rupee went down to its four-month low in the previous week.

According to Nikos Kardassis, the airline's CEO, they were limiting their non-rupee expenditures, such those that involve hiring foreign pilots and launching foreign advertisements.

He added that the airline had started increasing their meal uplift from India on specific routes to the Southeast Asia and to the Gulf. He estimated that doing so would results in savings of around Rs100 crore, or $20 million, every year.

At present, Jet Airways has 183 expat pilots, according to the report issued by the Civil Aviation Ministry. It had intended to employ more, primarily for its fleet of Airbus A330s and Boeing 737s, since it would help them save lots of money, as these pilots will be paid in dollars.

Furthermore, the Civil Aviation's Directorate General had already given the airline time limit, until next year, to decrease the number of their foreign pilots.

The devaluation of the rupee has caused airlines to face deep troubles. Apart from the wage of the foreign pilots, they also have to disburse loan interests, rent, and other maintenance costs in dollars. Starting from August last year, the exchange rate for rupee has dropped from Rs44.08, to its present rate of Rs53.48 per dollar. This, together with rising costs of the fuel, has contributed to decreased revenue gains.

Jet Airways, together with its economy brand Jet Konnect, have a total market share of 29.2%. The airline had lost a lot from the previous three quarters. In the third quarter alone, the loss amounted to Rs101 crore.

Analysts, nevertheless, see that the revenues in the fourth quarter would go up, as Kingfisher airlines started calling off flights and raising domestic charges. Even so, this may not be apparent in the financials, since there will also be an increase in the operating costs. In contrast to the last quarter of the previous year, domestic charges were higher by up to as much as 18% in the recent quarter of this year.

But operating expenses increased, and so did that cost of jet fuel, which went up by 15%, while the rupee had devalued by 11%. Stockbroking companies expect the airline to sustain a loss of Rs278 crore to Rs549 crore.

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