The board of directors of Jet Airways, the body that acts as the representative of all shareholders, will on Monday consider the cost cutting measures proposed by the management of the airline, the company said.
“The Audit Committee and the Board of Directors at their meeting scheduled to be held on Monday, 27 August 2018, while considering the unaudited financial results for the quarter ended 30 June 2018 will, inter-alia, take up the matters in relation to the cost reduction initiatives and turnaround plan, for which the management had earlier sought time,” it said.
Three weeks ago, media reports quoting unnamed pilots had reported that the airline was forcing pilots to take a 15% pay cut to help it tide over a cash crunch. It was also reported that the company may raise money by selling shares.
Company managements are free to implement measures to cut costs without seeking the approval of the shareholders or the board. However, they often pitch high-impact plans in front of the director board for feedback.
Jet Airways, on Aug 3, has already denied having any plans to sell shares, but confirmed that it was mulling certain measures to overcome the ‘tough phase’ that the company, and the airline industry in general, was going through.
Despite the high growth environment, the aviation industry is currently passing through a tough phase given a depreciating rupee and the mismatch between high fuel prices and low fares, CEO Vinay Dubey had said.
The areas of cost-cutting included sales and distribution, payroll, maintenance and fleet simplification, he added.
“As part of these measures, the company has been in dialogue with all its key stakeholders – internal and external. The dialogue with employees, has been to apprise them of the challenges being faced by the aviation sector in India and by the company in particular, with an intent to enlist their full support and cooperation for realizing necessary savings across all business functions,” he added.