Jet Airways joins SpiceJet, Vistara, starts variable pay to save wage bill

Plan covers 100 execs; fixed pay at 80-85%, rest based on staff performance, firm's profitability

Jet Airways is introducing 15-20 per cent variable pay component for its top management as it looks to save on its wage bill.

The Mumbai-headquartered airline has a higher cost structure than other listed domestic airlines and is undertaking cost control exercises to remain nimble. The variable pay scheme will be applicable to around 100 senior executives of Jet Airways and is expected to result in annual savings of Rs 25-30 crore, an airline source.

While the fixed salary component will be 80-85 per cent, the remainder will be linked to employee performance and airline profitability. The senior executives will also not receive salary increment this year.

A Jet Airways spokesperson did not offer immediate comments.

Some of Jet's peers already have a variable pay scheme in place. Vistara and SpiceJet too have variable pay for its senior management. Air India a productivity linked incentive scheme which was a variable pay out in mid-1990s but the same was discontinued in 2012.

Jet Airways has a staff strength of around 15,000 and had a wage bill of Rs 2,316 crore in the first nine months of FY 17. Employee costs rose 26 per cent on a year on year basis for the period. The airline has around 2000 pilots on its rolls whose salaries account for nearly half of the wage bill. Read more

GoAir and SpiceJet woo passengers with discounts

Two airlines are giving offers of cheaper tickets and discounts at hotels/cafes.GoAir is offering discounts up to 50 per cent at select hotels, cafes, spas and gift outlets through its boarding pass privilege scheme. SpiceJet has launched a pre-paid-cum-loyalty card called SpiceClub, which gives members discounted and free tickets on occasions such as birthdays and anniversaries. 

GoAir said its customers could avail of the discounts on presenting their boarding passes at any of the partner outlets within 30 days of their travel. SpiceJet said their card, designed to enhance engagement with frequent flyers, while also targeting new customers, offers privileges such as a free ticket on one's birthday, up to 50 per cent off on domestic air tickets for two on an anniversary, free vouchers, priority check-in and updates about new offers. The loyalty card membership has a minimum fee of Rs 599 and customers can avail of benefits worth Rs 5,999.

Amit Srivastava, vice-president at SpiceJet, said: “We are always looking at ways and means to serve our customers better. Customer satisfaction automatically translates into highest Passenger Load Factor (over 90 per cent here for the past 10 months) and higher ancillary revenue.”Read More.