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Jet Airways Defers Salaries of Some Employees

Posted: Thu Mar 29, 2018 8:13 pm
by kabq737
http://economictimes.indiatimes.com/ind ... 527915.cms

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Re: Jet Airways Defers Salaries of Some Employees

Posted: Thu Mar 29, 2018 8:23 pm
by enilria
If a U.S. airline did that the stock would've down 40%, not 4%. So, not sure what to take from that. Is it not as serious as it appears?

Re: Jet Airways Defers Salaries of Some Employees

Posted: Thu Mar 29, 2018 8:44 pm
by kabq737
enilria wrote:
If a U.S. airline did that the stock would've down 40%, not 4%. So, not sure what to take from that. Is it not as serious as it appears?

That's what I was wondering as well. Payroll seems like a very basic function of a business and I find it kind of strange that people are not more alarmed. If the airline is able to afford payroll but is deferring it anyway I wonder if they could get into legal trouble. Either way its an interesting situation.

Re: Jet Airways Defers Salaries of Some Employees

Posted: Thu Mar 29, 2018 8:57 pm
by MalevTU134
Didn't Kingfisher spend their last 7 or 8 agonizing months without paying salaries? Maybe that is "normal" in India? I mean, in my country (well, where I grew up), if you just miss a salary payment by a day, all hell breaks lose (unions are on top of you, etc.). Nobody will work even 2 months without getting paid.

Re: Jet Airways Defers Salaries of Some Employees

Posted: Thu Mar 29, 2018 9:46 pm
by subramak1
It shows a serious financial crunch. By law Indian employers must pay salary by the 5th of the following month.(Most Indian companies pay salaries every month).

Unfortunately in India, the laws are pretty strong but implementation has been weak historically. With some recent initiatives the present government has been trying to change that. This coupled with other scams in banking industry in India in the recent past means the banks are coming under increasing scrutiny. So they may be tightening their working capital lending.. Typically something that is used to pay salaries.

I could be wrong and this is only temporary.. But does not portend well

Subu

Re: Jet Airways Defers Salaries of Some Employees

Posted: Thu Mar 29, 2018 11:04 pm
by stl07
Jet airways sounds like the most uncreative airline name I have ever heard of

Re: Jet Airways Defers Salaries of Some Employees

Posted: Thu Mar 29, 2018 11:26 pm
by MalevTU134
stl07 wrote:
Jet airways sounds like the most uncreative airline name I have ever heard of

I agree. It's up there with Travel Service.

Re: Jet Airways Defers Salaries of Some Employees

Posted: Thu Mar 29, 2018 11:44 pm
by F27500
Again? .. Very classy airline.

Re: Jet Airways Defers Salaries of Some Employees

Posted: Fri Mar 30, 2018 12:13 am
by enilria
Did Delta go forward with the investment in them? They were in talks. If they did invest goodbye money. If they didn't then their new alliance is in trouble.

Re: Jet Airways Defers Salaries of Some Employees

Posted: Fri Mar 30, 2018 12:28 am
by Mayday111
stl07 wrote:
Jet airways sounds like the most uncreative airline name I have ever heard of

Yes. It is a very generic name.

Re: Jet Airways Defers Salaries of Some Employees

Posted: Fri Mar 30, 2018 1:07 am
by cpd
kabq737 wrote:
http://economictimes.indiatimes.com/industry/transportation/airlines-/-aviation/jet-airways-defers-march-salaries-of-some-employees/articleshow/63527915.cms

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If it cannot pay its staff, it should be wound up. If I worked for a company that deferred my pay, I'd be making legal hell for them until they did.

Paying staff for their work is the most fundamental part of business. Not doing so shows the company up as totally incompetent or corrupt. It's bad.

I'll bet senior management won't be affected by this. The sacred cows in management always sacrifice everyone before themselves normally (in most businesses).

Re: Jet Airways Defers Salaries of Some Employees

Posted: Fri Mar 30, 2018 1:24 am
by lightsaber
cpd wrote:
kabq737 wrote:
http://economictimes.indiatimes.com/industry/transportation/airlines-/-aviation/jet-airways-defers-march-salaries-of-some-employees/articleshow/63527915.cms

Mods please remove if already discussed. Search found no other topic on this.



If it cannot pay its staff, it should be wound up. If I worked for a company that deferred my pay, I'd be making legal hell for them until they did.

Paying staff for their work is the most fundamental part of business. Not doing so shows the company up as totally incompetent or corrupt. It's bad.

I'll bet senior management won't be affected by this. The sacred cows in management always sacrifice everyone before themselves normally (in most businesses).

Paying staff and vendors timely is crucial.

What is their unpaid fuel?

Management gets paid before pilots and mechanics this time. Gee, what do they know?

Ghad, I thought Jet was the one decent Etihad investment. Did they completely wiff? (Wiff =swing and miss until your turn is over).

Lightsaber

Re: Jet Airways Defers Salaries of Some Employees

Posted: Fri Mar 30, 2018 1:25 am
by Sooner787
If 9W can't meet payroll, how do they pay for fuel at far flung foreign destinations
once word of this gets around ?

Re: Jet Airways Defers Salaries of Some Employees

Posted: Fri Mar 30, 2018 1:47 am
by dtw2hyd
It is not the airline, it is the Indian financial system which restricts external commercial borrowing. So EY or DL may have unlimited access to cheap working capital, 9W cannot use it.

Every airline in India is suffering from this regulation. SG faced same issue.

Only way to beat the system is over value the company and pay as equity. Had EY paid $1B-$2B as equity, 9W would have been in better shape.

Something DL or any future investor should consider if they are planning to invest in any Indian airline.

Re: Jet Airways Defers Salaries of Some Employees

Posted: Fri Mar 30, 2018 2:02 am
by travaz
cpd wrote:
kabq737 wrote:
http://economictimes.indiatimes.com/industry/transportation/airlines-/-aviation/jet-airways-defers-march-salaries-of-some-employees/articleshow/63527915.cms

Mods please remove if already discussed. Search found no other topic on this.



If it cannot pay its staff, it should be wound up. If I worked for a company that deferred my pay, I'd be making legal hell for them until they did.

Paying staff for their work is the most fundamental part of business. Not doing so shows the company up as totally incompetent or corrupt. It's bad.

I'll bet senior management won't be affected by this. The sacred cows in management always sacrifice everyone before themselves normally (in most businesses).


I once worked for a company that every week the checks were no good. It was bad enough for me but I did have some other income to live on. I felt bad for the workers that had families and literally could not buy food. There needs to be more teeth in laws that protect workers. I walked away after a few weeks and never got the money. Oh and also they never gave the IRS the money they withheld from workers pay. That should be jail time.

Re: Jet Airways Defers Salaries of Some Employees

Posted: Fri Mar 30, 2018 2:27 am
by smithbs
travaz wrote:
I once worked for a company that every week the checks were no good. It was bad enough for me but I did have some other income to live on. I felt bad for the workers that had families and literally could not buy food. There needs to be more teeth in laws that protect workers. I walked away after a few weeks and never got the money. Oh and also they never gave the IRS the money they withheld from workers pay. That should be jail time.


I was once at a company that had trouble with paychecks. I took it as a sign to work up my resume. I managed to jump ship as one of the few who was not owed back pay.

That company was hand-to-mouth with cash. The problem is that a new project's cash would pay off the old projects, the employees and some debt, leaving hardly anything for the new projects. Once that snowball starts rolling, it's a death spiral.

Re: Jet Airways Defers Salaries of Some Employees

Posted: Fri Mar 30, 2018 2:57 am
by lightsaber
I didn't realize their net worth was so negative:
https://www.google.com/amp/s/www.indiai ... 035_1.html

Errr... That is bad. They overextended themselves a long time ago and just haven't recovered. They cannot borrow...

Not good.

Lightsaber

Re: Jet Airways Defers Salaries of Some Employees

Posted: Fri Mar 30, 2018 3:12 am
by unrave
This is the end of the financial year in India so it is not uncommon for companies to prioritise payments. Obviously this is not ideal but if it is a one off it shouldn't be a major concern.

Re: Jet Airways Defers Salaries of Some Employees

Posted: Fri Mar 30, 2018 3:28 am
by blrsea
Jet airways already has raised $300 million ECB funds earlier . If they can't set their house in order, that's their issue. The last few years since oil prices crashed has been good for Indian companies, but Jet still continues to flounder. Almost every other airline has managed to reduce losses except for Jet. There is something rotten. Last year or so, Jet was in similar position if I recall correctly.

India allows upto $1B ECBs for airlines sector for working capital requirements, with $300m limit per airline. Jet has already utilized this before. Check the link below and look for airlines working capital.

https://rbi.org.in/scripts/BS_ViewMasDi ... =10204#C45

Re: Jet Airways Defers Salaries of Some Employees

Posted: Fri Mar 30, 2018 3:40 am
by dtw2hyd
$300M is chump change for an airline of that size. Above that it has to borrow from failing crooked Indian banks at 15%.

Let me repeat one more time, you cannot run a 4% margin business by borrowing at 15%. Selling fritters on street side is more profitable.

Like any democracy, India is trying everything else before it fixes the actual issue choking entire aviation sector.

Re: Jet Airways Defers Salaries of Some Employees

Posted: Fri Mar 30, 2018 4:04 am
by sibibom
Its the end of the Financial year in India, many including the government doesn't pay for a month, later pays for 2 months together. Besides Jet has a date to disburse the salary in question, now if they miss that there is something to discuss. Else this is just wild speculation.

Re: Jet Airways Defers Salaries of Some Employees

Posted: Fri Mar 30, 2018 4:33 am
by neomax
dtw2hyd wrote:
Like any democracy, India is trying everything else before it fixes the actual issue choking entire aviation sector.


Yup

Re: Jet Airways Defers Salaries of Some Employees

Posted: Fri Mar 30, 2018 6:16 am
by BawliBooch
Another uncredited bureau report from the house of Economic Times aka hatchet job ghost-written at Interglobe PR HQ in Gurgaon! :roll:

My 2 cents - I dont think Jet Airways is going through a cash crunch. More likely salaries are delayed because of FY ending accounting snafus (Mar 31 closing). I know their accounting dept is in a little bit of flux right now because of rearrangements being done for the mess caused by GST. Indigo & SpiceJet are in a similar mess as well but those wont get reported for obvious reasons.

Re: Jet Airways Defers Salaries of Some Employees

Posted: Fri Mar 30, 2018 6:19 am
by BawliBooch
dtw2hyd wrote:
Like any democracy, India is trying everything else before it fixes the actual issue choking entire aviation sector.


Very true! But that merits a separate discussion, perhaps on Non-Av?

Bottomline- there is no cash crunch at Jet Airways. Non story being blown out of proportion based on a hatchet job article.

Re: Jet Airways Defers Salaries of Some Employees

Posted: Fri Mar 30, 2018 7:16 am
by FlyHappy
BawliBooch wrote:
Another uncredited bureau report from the house of Economic Times aka hatchet job ghost-written at Interglobe PR HQ in Gurgaon! :roll:

My 2 cents - I dont think Jet Airways is going through a cash crunch. More likely salaries are delayed because of FY ending accounting snafus (Mar 31 closing). I know their accounting dept is in a little bit of flux right now because of rearrangements being done for the mess caused by GST. Indigo & SpiceJet are in a similar mess as well but those wont get reported for obvious reasons.


why is the report a "hatchet job" ? - it seems dry, terse and factually written. Are the facts not true as written?

And I ask you (since you have opined that you "dont think Jet Airways is going through a cash crunch"), regardless of complexities introduced by GST, would an organization the size of Jet not have clear and distinct accounting staff responsible for payroll ? Why would GST rollout prevent paying employees? What possible reason does a high profile company take the public damage (stock value, employee morale) other than a cash crunch?

Finally why would not such events at Indigo or SpiceJet be reported? Have they also been deferring pay?

Genuinely curious.

Re: Jet Airways Defers Salaries of Some Employees

Posted: Fri Mar 30, 2018 7:29 am
by Waterbomber
Hadn't I said that 9W is the last piece of the crumbling EY empire, weeks before the first doubts were cast on this website?
Quite corect Dtw2hyd, 9W is not sustainable.

Back when they were running their scissor hub in BRU, the A330 flights were full but even so they never managed to make a profit. The service was poor and they gained quite a bad reputation.
Back when they started said scissor hub, Naresh Goyal pledged to make of BRU a huge 5th freedom intercontinental hub. They were going to build a 5 star hotel in BRU that would also produce the catering for all the flights. None of that ever came and they ended up dumping the entire scissor hub for a codeshare with KL in AMS.
9W is not going to make it like that.
DL's competent management team could turn things around but why bother with 9W when there are much better prospects among the local LCC's like Indigo or Spicejet?

Re: Jet Airways Defers Salaries of Some Employees

Posted: Fri Mar 30, 2018 7:35 am
by neomax
BawliBooch wrote:
Non story being blown out of proportion based on a hatchet job article.


This level of sensationalism is completely normal for the Indian media, but credit where credit is due, the fact that there is no cash crunch causing them to withhold salaries only adds fuel to the fire. That is even more shameful if true.

Re: Jet Airways Defers Salaries of Some Employees

Posted: Fri Mar 30, 2018 7:51 am
by Jetty
Waterbomber wrote:
Back when they were running their scissor hub in BRU, the A330 flights were full but even so they never managed to make a profit. The service was poor and they gained quite a bad reputation.
Back when they started said scissor hub, Naresh Goyal pledged to make of BRU a huge 5th freedom intercontinental hub. They were going to build a 5 star hotel in BRU that would also produce the catering for all the flights. None of that ever came and they ended up dumping the entire scissor hub for a codeshare with KL in AMS.
9W is not going to make it like that.

How's that relevant to the current situation? If anything, the move to AMS was a smart and profitable one. It's a more convenient airport with low taxes, more O&D and much more connection opportunities without the high costs of operating a scissor hub on the other side of the world.

Re: Jet Airways Defers Salaries of Some Employees

Posted: Fri Mar 30, 2018 2:25 pm
by vadodara
Very true; this is fake news. This is nothing but a conspiracy to malign Jet to prevent it from taking over Air India.

Re: Jet Airways Defers Salaries of Some Employees

Posted: Fri Mar 30, 2018 3:15 pm
by devmapper
Wait, now all the news outlets in India are are doing a hatchet job on 9W? You mean like how 9W's owners reportedly paid for hatchet jobs on IT and AI in the past? :duck:
9W burned through the cash injected by EY pretty quickly. Not to mention the dire financial straits they were in just before the GOI changed rules to allow EY to invest in 9W. Even accounting for the pricing pressure exerted by a GOI-subsidized AI, 9W management hasn't really inspired confidence. Domestic marketshare has been inching downwards steadily, new routes are started and discontinued within months without a bedding-in period and even international ops on what should be highly profitable medium/long haul markets (to the Gulf, LHR and AMS/CDG) haven't been pulling in money the way AI's "unprofitable" ULH and LH routes (according to ANet wisdom) have been. I certainly hope 9W recovers enough to start paying its workers like all the supporters here on ANet think they will, because unpaid salaries are a terrible thing for workers in a comparatively high inflation economy like India.

Re: Jet Airways Defers Salaries of Some Employees

Posted: Sat Mar 31, 2018 4:37 pm
by binayak
devmapper wrote:
Wait, now all the news outlets in India are are doing a hatchet job on 9W? You mean like how 9W's owners reportedly paid for hatchet jobs on IT and AI in the past? :duck:
9W burned through the cash injected by EY pretty quickly. Not to mention the dire financial straits they were in just before the GOI changed rules to allow EY to invest in 9W. Even accounting for the pricing pressure exerted by a GOI-subsidized AI, 9W management hasn't really inspired confidence. Domestic marketshare has been inching downwards steadily, new routes are started and discontinued within months without a bedding-in period and even international ops on what should be highly profitable medium/long haul markets (to the Gulf, LHR and AMS/CDG) haven't been pulling in money the way AI's "unprofitable" ULH and LH routes (according to ANet wisdom) have been. I certainly hope 9W recovers enough to start paying its workers like all the supporters here on ANet think they will, because unpaid salaries are a terrible thing for workers in a comparatively high inflation economy like India.

9W has said that the salaries are gonna be paid by April 10.
Moreover I think they will be able to well utilize AI's wide bodies and int'l ops given that even they have a similar type of fleet (B777s). Together this will be a dominant FSC in india . And 9W currently has good hospitality levels so will be for AI. We need this as this might give a slight jerk to Indigo's monopoly. There were reports in late 2000s when 9W and AI were about to enter into a partnership with the sole aim of 50% int'l market share from india goes to indian carriers. I hope they achieve it now.

Re: Jet Airways Defers Salaries of Some Employees

Posted: Sun Apr 01, 2018 8:31 am
by dtw2hyd
BawliBooch wrote:
...
Bottomline- there is no cash crunch at Jet Airways. Non story being blown out of proportion based on a hatchet job article.


I wouldn't question you, because like any issue with India, reality will be totally different from general public perception and known to only a few people.

Having said that, 9W cabin crew seems to be indifferent and interiors could use some moola.

Based on my recent anecdotal experience, Delta's AVML was far better than 9W's veggie options, which was a surprise. 9W's AMS-BLR cabin crew was bad, BOM-AMS crew was good.

Why would an Indian carrier serve low quality vegetarian food compared to an American carrier? Maybe Indian food habits are changing, my old school mindset still expects traditional food, or I am just a DL fanboy.

Re: Jet Airways Defers Salaries of Some Employees

Posted: Sun Apr 01, 2018 9:02 am
by Spiderguy252
There may be nothing to this story as alluded to in the posts above.

However, if it is indeed true - does anybody really believe that 9W is a realistic candidate to take over Air India? Colour me skeptical.

Re: Jet Airways Defers Salaries of Some Employees

Posted: Sun Apr 01, 2018 9:25 am
by dtw2hyd
Spiderguy252 wrote:
There may be nothing to this story as alluded to in the posts above.

However, if it is indeed true - does anybody really believe that 9W is a realistic candidate to take over Air India? Colour me skeptical.


If Delta is going fund the takeover of AI, 9W's financial situation is irrelevant. If Swamy's allegations are true, 9W is already 100% owned by Abu Dhabi, 76% of Naresh Goyal's share is underwritten by UAE though some Hongkong bank.

Re: Jet Airways Defers Salaries of Some Employees

Posted: Mon Apr 02, 2018 12:12 am
by BawliBooch
dtw2hyd wrote:
I wouldn't question you, because like any issue with India, reality will be totally different from general public perception and known to only a few people.

Having said that, 9W cabin crew seems to be indifferent and interiors could use some moola.

Jet is a typical Lala company yaar. Do the absolutely basic and get done with it! That is the attitude. Goyal has said on more than one occassion that he wants the airline to be "Full Service at Low Cost". Perhaps its possible to do that or perhaps not. But thats the philosophy and i say good luck with that.

As for cash crunch, Jet had some problems in the 2010-2012 period when Lalaji was reluctant to move his own cash to keep the airline going. There were cases of catering companies refusing to upload flights until they were paid. But now those hoary days are behind them. Lalaji is moving money into the airline again. I dont cover aviation anymore, but if any journalist is looking for a good story, they should snoop around Lalaji's shell companies in Isle of Mann - JetWing's, Magic et-al. Lalaji is a pucca player dude. He knows how to move cash! :P

dtw2hyd wrote:
Based on my recent anecdotal experience, Delta's AVML was far better than 9W's veggie options, which was a surprise. 9W's AMS-BLR cabin crew was bad, BOM-AMS crew was good.

Why would an Indian carrier serve low quality vegetarian food compared to an American carrier? Maybe Indian food habits are changing, my old school mindset still expects traditional food, or I am just a DL fanboy.

DL has upped its game. Jet has stayed the same. The difference is glaring now.

Re: Jet Airways Defers Salaries of Some Employees

Posted: Mon Apr 02, 2018 2:48 am
by Jouhou
dtw2hyd wrote:
BawliBooch wrote:
...
Bottomline- there is no cash crunch at Jet Airways. Non story being blown out of proportion based on a hatchet job article.


I wouldn't question you, because like any issue with India, reality will be totally different from general public perception and known to only a few people.

Having said that, 9W cabin crew seems to be indifferent and interiors could use some moola.

Based on my recent anecdotal experience, Delta's AVML was far better than 9W's veggie options, which was a surprise. 9W's AMS-BLR cabin crew was bad, BOM-AMS crew was good.

Why would an Indian carrier serve low quality vegetarian food compared to an American carrier? Maybe Indian food habits are changing, my old school mindset still expects traditional food, or I am just a DL fanboy.


In my anecdotal experience the quality of my vegetarian meals in economy had more to do with the airport I was flying out of than the airline, but business class vegetarian meals had more to do with the airline.