Headcount Decline continues in Kingfisher Airlines

August 31, 2012 at 10:33 am (Industry News) (, )

In a major setback to the Kingfisher Airlines, an exodus of people from the industry was seen and is believed to affect the service and operations of the airlines for a long period. With falling employee costs in the April-June quarter, the airlines have already lost at least 3,500 employees those have resigned last year. The decline in headcount is 4,200 from 7,700 one year ago out of which 40% of the employees are not working as at least 20 airport stations are closed by the airline.

As the month of August saw a row of strikes by the employees demanding their salaries, there are chances of more pilots joining the agitation if their salaries are not paid by the end of the banking hours. With 15 flights already cancelled, the airline is losing employee which is quite evident from its April-June quarter results.

While the employee costs was Rs 173.66 crore in the previous fiscal, it has fallen 66% to Rs 58.88 crore in the same quarter this year. The employee costs are considered to play a major role in the airlines operation as they represent 10-12% of the total operating cost of an airline.

With the exodus still continuing, many employees with soft skills are seeking jobs in other sectors while others with airline-specific talent creating a surplus in the domestic job market when the airline sector goes though a tough phase.

But the Kingfisher Airlines executives are hopeful and optimistic that the industry would bounce back with the rejoining of most of its employees. They say the airlines will work full schedule on its domestic and international operations as soon as it gets an investor or sort out its operational issues.

Even talks are going on with several strategic and financial investors in order to have more capitals which will lead the airline to a sustained profitable position. This was declared by the airlines while announcing the April-June quarter results.

The Kingfisher Airlines has a net loss of Rs 650.78 crore for the three months till 30th June is two-and-a-half times more than the net loss in the corresponding quarter a year ago, which was Rs 263.53. The loss of the airlines is attributed to the high jet fuel costs and grounded planes.

But the situation is not the same with other airlines. Though the Jet Airways (India) has cut short around 600 employees from the April-June quarter of the last fiscal, it has increased the employee costs this fiscal. As compared to the corresponding quarter of the previous fiscal, the airlines has made an 11.38% increase in employee costs to incur Rs 401 crore in the April-June quarter this year.

According to K.G.Vishwanath, vice-president, commercial strategy and investor relations, Jet Airways is planning to reduce the number of high-cost expatriate pilots from 200 to 50 by the end of the current fiscal. According to leading manpower consultants in India, Airlines Recruitment is least lucrative and and at all all time low.

The Spice Jet airline has also recorded an increase of 71% in its employee costs for the April-June quarter of this year to yield an amount of Rs 131.35 crore against Rs 76.93 crore one year ago.



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