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

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

The case is about the retrenchment drama that unfolded in one of India's leading aviation companies, Jet Airways (India) Limited (Jet), in late 2008. After showing the door to more than 1000 employees in a bid to streamline its operations, Jet was faced with immense criticism and opposition by various organizations and political parties.

Jet's chairman Mr Naresh Goyal reinstated the employees a day later saying that he was not aware of these sackings. The Indian aviation industry was going through a tough phase and experts felt that it was in the interest of the company to retrench employees to remain competitive.

Experts largely felt that Mr Goyal had capitulated under pressure from external parties while others felt that all may not be well with the organizational communication mechanisms at Jet.

"We have created high morale for our people. Our employees believe in the company. They believe it's their company. There's a feeling among employees that if the company makes money, it's their money and if the company loses money, that's their loss."

Naresh Goyal, Chairman, Jet Airways (India) Limited, in July 2007.

"While the mishandling of the Jet Airways sacking and reinstatement of 1,900 employees was an HR and PR disaster, the larger implications of what happened are also worth considering. It is not just that the chairman of India's most successful airline became the butt of jokes, it is also a question of what he knew, when he knew it, and who did the bungling."

- Anjuli Bargava, Columnist, Business Standard, October, 2008.

"The sackings were completely illegal. There was no notice nor was government's permission taken to sack 800 employees. Perhaps they realized their folly and decided to take these employees back. The matter would have landed in the court otherwise."

- Anand Pujari, Labour lawyer, SI Joshi & Co., in October 2008

CASE ANALYSIS:

Jet Airways is the second largest Indian airline based in Mumbai, Maharashtra. It operates over 400 flights daily to 76 destinations worldwide. Its main hub is Mumbai, with secondary hubs at Delhi, Kolkata, Chennai, Cochin, Ahmedabad, and Bengaluru. It has an international hub at Brussels Airport, Belgium. Jet Airways is owned by Naresh Goyal.

Jet Airways was incorporated as an air taxi operator on 1 April 1992. It started commercial operations on 5 May 1993 with a fleet of four leased Boeing 737-300 aircraft. In January 1994 a change in the law enabled Jet Airways to apply for scheduled airline status, which was granted on 4 January 1995. It began international operations from Chennai to Colombo in March 2004. The company is listed on the Bombay Stock Exchange, but 80% of its stock is controlled by Naresh Goyal (through his ownership of Jet's parent company, Tailwinds). It has 13,177 employees (as at 31 March 2011).

Naresh Goyal - who already owned Jetair (Private) Limited, which provided sales and marketing for foreign airlines in India - set up Jet Airways as a full-service scheduled airline to compete against state-owned Indian Airlines. Indian