India's Largest Private Airline Reinstates Sacked Employees

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17 October 2008

India's largest private sector airline has reinstated more than 800
employees who were sacked earlier in the week. As Anjana Pasricha
reports from New Delhi, the dismissals - the largest in Indian aviation
history - underline the crisis in the sector, which is piling up
massive losses.  


Hundreds of employees of Jet Airways were
jubilant as they returned to work Friday. Their surprise reinstatement
came just two days after they were fired.

The company had said
the dismissals were prompted by the need to cut costs, and said the
number of people laid off would increase to 1,900.

But Jet Airways Chairman, Naresh Goyal, reversed course following massive protests by the sacked employees, mostly cabin crew.

"I
apologize for all the agony what you must have gone through," he said.
"I request all of you to start from tomorrow morning your work as of
before."

Domestic media reports say the company may have changed
its decision due to political pressure. The dismissals were the largest
ever by any airline.

The problems of the sacked employees are
over. But experts say the troubles faced by the once-booming aviation
sector could deepen in the months to come.  

According to
industry estimates, airlines - both private and state owned - will
accumulate losses of $1.5 billion this year.  

The
downturn comes after the aviation sector witnessed frantic expansion in
the last three years. Nearly a dozen new airlines started operations,
bought new jets, and cut fares to attract tens of thousands of new
fliers in a booming economy.

But soaring fuel prices in the past year have pushed up ticket prices, and many passengers are again opting to travel by train.

As
a result, passenger traffic, which grew by 40 percent last year, has
plummeted. And there are fears that there will be more empty seats as
the global credit crunch begins to bite India.

The cash-strapped
aviation sector now owes state-owned oil companies millions of dollars,
and has appealed to the government for a $1 billion loan to tide over
the crisis. But Civil Aviation Minister, Praful Patel, says help will
not be forthcoming.

"There is no bailout package as everybody is
making out, that government is going to write a check of taxpayers
money to an airline," he said. "That has never been the case."

Industry
experts say that at least some airlines may shut down, while others may
merge with bigger airlines in a bid to survive the turbulent times.