HR Problems at Jet Airways: Coping with Turbulent Times in the Indian Aviation Industry

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Case Details:
Case Code : HROB117
Case Length : 16 pages
Period : 2007-2008
Pub Date : 2009
Teaching Note :Not Available
Organization : Jet Airways (India) Limited
Industry : Aviation
Countries : India

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Introduction Contd...

The sudden decision not only took the employees by surprise but also caused alarm in the Indian aviation sector. Amidst great furor and opposition by various organizations and political parties, Naresh Goyal (Goyal), chairman of Jet, reinstated the employees a day later amidst great emotional drama. He was quoted as saying he had been appalled by the retrenchments of his employees, which he claimed, he had come to know only through media reports.

He added that he would "not be able to live as long as he lives" with the tough decision his management had taken and clarified that he was taking back the employees as they were "family to him and as head of the family he would take care of them."7

A month later - in November 2008, Jet announced that it would consider serious salary cuts for its staff to handle the aviation crisis.

While many industry analysts were surprised by the turn of events that had led to the reinstatement of the sacked employees, they opined that Jet had been forced to take drastic decisions such as laying off employees or initiating pay cuts because of the turbulent phase through which the aviation industry was passing.

In September 2008, the International Air Transport Association8 (IATA) had predicted that world over the aviation industry would lose about US$5.2 billion based on an average jet fuel price of US$140 . The rise in fuel prices had pushed the fuel bills of the aviation industry to US$186 billion by the end of the year 2008.9...

Excerpts >>

7] Anjuli Bhargava, "My Management Did It,", October 18, 2008.
8] The International Air Transport Association (IATA) with its headquarters in Montreal, Quebec, Canada, is an international trade body with 230 airlines (as of 2008) as members and is involved in ensuring safety of passengers, compliance with regulations, and helping its member airlines to improve efficiency.
9] "Airlines to Lose US$5.2 Billion in 2008 - Slowing Demand and High Oil to Blame,", September 3, 2008.


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