Sept. 14 (Bloomberg) -- Jet Airways (India) Ltd., seeking to regain customer confidence following a five-day strike by its pilots, said it would cut local fares by 50 percent for three days starting today.
“With these new low, limited-time fares, we hope to welcome travelers back aboard Jet Airways,” Chief Executive Officer Wolfgang Prock-Schauer said yesterday in a statement.
The airline scrapped more than 1,000 flights since Sept. 8 after some 400 pilots walked off their jobs, protesting the dismissals of four colleagues. The airline must ensure such labor problems don’t hamper its operations as it seeks to win back customers, said Binit Somaia, South Asia director at the Centre for Asia Pacific Aviation, an industry consultant.
“It affects the brand perception,” Somaia said. “Bookings for the carrier get affected because people are worried whether this can happen again. Then the airline faces a financial impact.”
Shares of Jet Airways rose as much as 4.6 percent, the most in two weeks, to 270.4 rupees, and changed hands at 264.8 rupees at 10:11 a.m. in Mumbai. The stock has gained 30 percent this year compared with a 67 percent advance for the Sensex index.
The airline scrapped flights after pilots belonging to the newly formed National Aviators Guild called in sick, refusing to work until the carrier recalled their colleagues the Guild says were dismissed for initiating steps to form a union.
Return to Work
The strike led to daily revenue losses of about $2.2 million and cancellations of about 230 flights a day, affecting as many as 100,000 passengers, Vice President K.G. Vishwanath said yesterday.
Domestic bookings will increase by tomorrow as the pilots returned to work, Sudheer Raghavan, chief commercial officer, said yesterday at a press conference in Mumbai. Jet Airways started all its international flights, he said.
Jet Airways transferred as many as 60 percent of the passengers booked on its flights to Air India, the national carrier, and other airlines during the strike, Jet Airways Executive Director Saroj K. Datta said yesterday.
The four pilots were reinstated and a consultative group was formed to deal with future labor issues, Jet Airways said. The consultative group will have two directors from the airline’s board, the chief executive officer and five representatives of the pilots, Datta said.
Double Rates
Domestic bookings slumped 39 percent to 14,000 a day since the strike began, Raghavan said Sept. 9. International reservations were down 9.5 percent to 9,500 a day. Bookings fell to 7,000 in the last two days of the strike, Datta said.
Rival carriers began to charge fares at almost double the usual rates after the strike hampered Jet Airways’ operations, the Daily News & Analysis newspaper reported Sept. 11, without saying where it got the information. India’s Directorate General of Civil Aviation asked airlines to charge fares at rates that prevailed in the week ended Sept. 6, according to a statement from the Press Information Bureau.
As many as 400 captains and first officers protested the firing of their colleagues, said Sam Thomas, general secretary of the Guild. The airline then asked a court to force the striking pilots to return to work.
Pilots formed the Guild as they were concerned about the lack of a system to facilitate a dialogue between them and the management, Datta said. The Guild continues to exist as of now, said Girish Kaushik, its president. He didn’t elaborate.
Jet Airways posted a first-quarter loss of 2.25 billion rupees ($46 million) as slowing economic growth damped travel demand. The airline slashed flights to the U.S. and other long- haul destinations to save as much as $600 million this year.
Airline losses globally may total $9 billion this year, according to the International Air Transport Association, almost double the group’s previous forecast.
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