Prock-Schauer: Lean & mean

Mumbai, July 1: Jet Airways has almost halved the workforce of Air Sahara to 2,100 from 4,100 since its acquisition of the airline in April.

After the takeover, Jet has renamed Air Sahara as Jetlite and positioned it as an airline offering low fares.

Besides cutting staff, Jet has reduced costs by lowering lease rentals on aircraft owned by Air Sahara and rationalising the use of office space.

Jet has also renegotiated certain contracts and services and reduced overhead costs.

At a later stage, Jet plans to reduce handling, distribution and catering costs.

Sources said most of the retrenched employees were ground staff. They also did not rule out the possibility of many of them being absorbed by the Sahara group. This, however, was not be confirmed by the companies.

In a conference call with analysts after the fourth-quarter results, Jet CEO Wolfgang Prock-Schauer said benefits from the acquisition were realised in the first quarter of 2006-07.

In the next two to three quarters, the company expects to capture all the benefits of the takeover. Prock-Schauer said Jetlite would operate as an independent carrier with its own offices. Jetlite would also have access to traffic rights for Sahara’s international operations.

The objective is to improve yields and lower costs through the changes and by leveraging the strengths of Air Sahara.

For instance, Jetlite now has business and economy classes. Gradually, the aircraft will have only the economy class. Prock-Schauer also listed the benefits of the amalgamation.

Apart from using the available resources more efficiently, the airlines, which have a strong presence in many parts of the country, expect to offer a better coverage in terms of flights.

Jet will also have access to Sahara’s overnight parking base and peak-time departure slots in the metros. Other positives include access to skilled personnel such as pilots and engineers and improved levels of productivity through economies of scale.

Jet plans to get all the 24 planes of Air Sahara on air by October. At the time of the takeover, Air Sahara had grounded 10 aircraft.

It is also looking at more overseas flights for Jetlite, subject to a government clearance. Jet doesn’t expect the international routes to become profitable for another 12 to 18 months.