PRESENTATION ON

JET AIRWAYS
LABOUR DISPUTE

SUBMITTED BY :
RAM KRISHAN SHARMA
SAUMYA SHUKLA &
SUCHITRA SRIVASTAVA
MBA(F&C) IIIrd SEMESTER
 INTRODUCTION:
✓ Disputes in domestic and multinational companies in India
have risen since 2008. It is not sure whether labour unrest is
here to stay or if it is just a side effect of the toppled
economy.
✓ Citing a plethora of faults with employers, the labour
community, represented by various organisations ranging from
local trade unions to officers associations continuously
engaged themselves in strikes and protests.
✓ The Indian economy which is about to lean heavily on the
service sector will be affected if the problem is not solved
soon. When Jet Airways pilots went on a strike for 5 days,
there were millions of passengers who ended up in trouble.
✓ The results? a bad reputation for both the company and
employees plus great monetary loss.
✓ While India's age old labour laws stand safeguarding the
interests of the supposedly less powerful ''employee''
✓ The case deals with the labour laws in India and its effect
and influence in the modern day trade unions and
businesses.
✓ Explaining the case of the Jet Airways labour dispute in
2009, the case brings in the issues of increasing labour
discontent and makes a case for why a major reform in
labour legislations is required.
✓ This case can be used to:
(1) understand the need and importance of Indian labour
laws and have an overview of all the laws related to Indian
workers.
(2) discuss the causes for the increase in labour disputes in
India in general and that of Jet Airways in particular.
(3) discuss and debate all the possible ways of and means to
resolve the impasse between Jet Airways retrenched pilots
and Jet Airways management and to address the stand-off
amicably.
 ABOUT THE CASE
✓ On September 8, 2009, around 650 pilots of
Jet Airways, India's largest private airline
company, took a mass sick leave as a protest
against the management that sacked two of its
pilots for joining a union. The pilots' union named
National Aviators Guild (NAG), was formed in
August 2009.
✓ Thousands of passengers were stranded because
of the flash strike which lasted five days and
forced the management to cancel around 900
flights.
✓ The strike is an added woe to the already ailing
Indian aviation industry. But surprisingly, aviation
industry is not the only industry which suffered
from labour discontent in recent times.
Multinational companies in India—Nestle, Hyundai
and others—also suffered from similar labour
Bankruptcy and cessation of services:
✓ As of November 2018, Jet Airways has been reported to have a
negative financial outlook due to increasing losses. In March 2019
it was reported that nearly a fourth of Jet Airways' aircraft
were grounded due to unpaid lease rates.
✓ On 25 March 2019, Mr. Naresh Goyal and his wife Anitha Goyal
stepped down from the board of directors.
✓ On 5 April, Indian Oil Corporation stopped supplying fuel to the
airline, citing non-payment of dues as the emergency funds have
still not been credited. On April 17, the airline suspended all
flight operations, due to lenders rejecting Rs 4 billion of
emergency funding and its membership in the International Air
Transport Association (IATA) was suspended.
✓ On 17 June, after getting no acceptable offers from Etihad
Airways and Hinduja Group, lenders to Jet Airways decided to
refer the company to National Company Law Tribunal (NCLT) for
bankruptcy proceedings with debt of $1.2 billion.
✓ As the group faces insolvency proceedings in the Netherlands
✓ More than half the carrier’s 760 pilots, banned from
striking without informing the airline’s management ahead
of time, had reported sick since Tuesday, forcing the
cancellation of hundreds of flights and affecting thousands
of passengers.
✓ The pilots say they went on mass leave after four of their
colleagues were sacked because they were trying to get the
management to recognise their newly formed union.
✓ The dispute is seen as an example of touchy labour relations
in a country where creaky labour laws place many limits on
hiring and conditions for retrenchment, hurting
competitiveness and leading to worker unrest.
✓ The National Aviators Guild, a Jet Airways pilots’ union,
could not immediately be reached for comment.
✓ Jet has said the four pilots were fired for indiscipline and
called the mass absence of pilots a “simulated strike”.
Out of the frying pan, into the fire:
✓ At the time of the grounding, Jet had near about 20,000 employees
— some report put the number at 23,000 — many of whom haven't
got their salaries for months on run. Apart from regular employees,
the airline also had thousands of outside workers linked to its
operations.
✓ A good many top executives are among thousands of Jet's employees
lining up at the job market after the airline stopped its operations
and its CEO admitted that he "didn't have an answer as to the fate
of its 20,000 employees." HR and recruitment companies like Team
Lease and ABC Consultants have confirmed the rush of jobseekers
who once were Jet employees.
✓ More than 1,300 pilots are now out of job after the airline halted
operations on April 17. According to a PTI report, the officers &
employees union of Jet has demanded intervention from the
government to stop a Kingfisher-like situation, where the staff
never got pending salaries after the airline wound down.
✓ CXO salary packages are more than Rs 1 crore a year without ESOPs.
Mid- to senior-level staff take home anywhere between Rs 35 lakh
to over Rs 1 crore per year, HR company insiders have revealed.
✓ The top talent at a firm are the first to know when the business is
 ISSUES INVOLVED:
1.) Costly purchase :
Many aviation experts believe the start of Jet's financial
troubles can be traced back to the 2006 purchase of Air
Sahara for $500 million in cash. Founder Naresh Goyal
reportedly ignored the advice of professional associates who
said he was paying too much. Market reaction to the deal was
also decidedly mixed. The budget carrier was rebranded
"JetLite" but it haemorrhaged money and in 2015, Jet wrote
off its entire investment. "The acquisition is still a millstone
around the company's neck," Devesh Agarwal, editor of the
Bangalore Aviation website, told AFP.
2.) Budget airlines :
India's aviation sector is fiercely competitive and Jet has taken
a battering from a number of hugely successful low-cost
airlines, including IndiGo, Spice Jet and Go Air. Experts said
the people running Jet failed to take the trio seriously when
they were founded between 2005 and 2006, offering cut-price
3.) Poor management :
Experts put a lot of the blame on Goyal's management style. They say his
decision to have a single management team, headed by himself, running all
Jet's operations was a crucial mistake. Analysts say he should have had one
team running the full-service carrier and another running the budget flyer.
"Jet lacked a concrete business model and fiddled with it often, which
confused investors, (and) passengers alike," said Agarwal, who believes the
company's decisions lacked transparency. Goyal has also been accused of
making bad investments and failing to address the company's deteriorating
financial predicament while borrowing heavily. "Simply put, they spent more
than they earned and kept accruing debts," added Agarwal.
4.) Fluctuating crude :
All of India's carriers are particularly sensitive to fluctuations in global
crude prices because the Asian giant is a major importer of oil. When the
rupee is weak, which it has often been over the past year or so, fuel -- the
biggest cost burden for airlines -- becomes more expensive. Soaring oil
costs and the Indian rupee hitting record lows last year affected all Indian
carriers
5.) Failure to attract investors :
Aviation analysts say Goyal's failure to find a strategic investor to pump
money into Jet extended the airline's losses, contributing to the financial
RESOLUTIONS ADOPTED BY THE COMPANY
✓ The plan incorporates a series of critical measures for laying
the foundations for a return to profitability, including long-
term network, and fleet and product developments to
optimise the airline's domestic and international operations.

✓ Focus areas for international operations will include network

developments, including new services to markets such as
Europe, China, Australia and Southeast Asia, expanded
frequencies to existing routes and additional codeshares.

✓ Jet Airways two and three class aircraft product will also be
enhanced and the seat count optimised on wide-body Boeing
777 and Airbus A330 aircraft, the report said.

✓ In addition, the domestic business model is aimed at

improving connectivity across India and worldwide, while
removing complexity in product and fleet, including the
standardisation and reconfiguration of the Boeing 737 fleet.

✓ To initiate the three-year turnaround plan, the Jet Airways

✓Jet Airways has announced a new team at the helm with Cramer
Ball as its new Chief Executive Officer and Subodh Karnik as the
Chief Operating Officer pending regulatory approval.

✓Ball 46, an Australian national, is a certified accountant and an

accomplished airline executive with extensive experience in the
aviation industry.

✓Karnik brings with him rich experience in the aviation sector,

leading and assisting airlines in fleet and network planning, global
alliances, joint ventures and improving overall efficiencies at
international airlines.

✓Naresh Goyal, Chairman of Jet Airways, said that the coming

together of Jet Airways and Etihad Airways has already proved a
success for the two airlines and, importantly, has been beneficial
for travellers, and will also bring significant benefits to the Indian
economy, both in terms of growth, job creation, trade and tourism.
 SUGGESTIONS:
✓ The justification for the investment of time, money, or
any other resources in training and development activities
is that it can contribute to the productivity and
profitability of the enterprise.

✓ Training activities, properly planned, conducted and

evaluated, help to raise the productivity of the tourism
industry through the more effective use of human
resources.

✓ The role of Jet Airways in the promotion of tourism in

India can not be ignored but there is a need to bring some
innovative changes in the management strategies for
making the efforts meaningful. Jet Airways play a very
✓It has to bring innovative changes in the marketing strategies for
competing with competitors of this field. The Jet airways has to
introduce tourism oriented schemes for attracting foreign tourist,
for example, budget tours in off seasons, incentive tours etc.
✓In order to manage change for productivity, organization members
need to understand their own organisation's culture, and to see
their own organization as a potentially flexible and dynamic system.

✓If Jet Airways wants to have a stand in the market against its
competitors then the carrier has to have better and effective
publicity of its promotional schemes and better marketing
strategies.
✓The Jet airways has to introduce tourism oriented schemes for
attracting foreign tourist, for example, budget tours in off seasons,
incentive tours etc.
THANK YOU!