Apologizing, Indian Airline Head Reinstates Workers

NEW DELHI, Oct. 17 -- Two days ago, the chairman of India's largest domestic carrier announced that soaring fuel prices and slowing global growth had left the company with no choice but to eliminate 1,900 jobs.

Then he changed his mind.

"The management will have to understand sometimes in a family there are disagreements, but the father of the family decides," said Naresh Goyal, chairman of Jet Airways, apparently referring to himself.

At a news conference around midnight Thursday, Goyal apologized for the "agony" the firings had caused and denied that mounting political pressure had forced the airline to reverse its decision.

"This was the most emotional day in my life. My daughter is 19 years old. They are 20 or so," Goyal said of the employees. "I cannot stand to see their trauma."

India's new airlines had become a symbol of the country's economic boom. Young people from small towns and cities were hired for glamorous jobs as flight attendants on dozens of low-cost airlines that sprang up during recent boom years. But the industry is expected to lose a record $2 billion this year, and some of the airlines have merged and taken other steps to trim expenses.

This week, Jet formed an alliance with its main competitor, Kingfisher Airlines, to save $307 million.

But Goyal said his company will have to find solutions to its problems other than cutting jobs.

Thousands of Jet employees, dressed in the airline's canary yellow uniforms, protested the firings this week in Mumbai, where the country's largest airport is located. And a political party said it would prevent Jet from operating flights in Mumbai if it did not reconsider the dismissals.

Labor and Employment Minister Oscar Fernandes demanded an urgent inquiry into the job losses and called the airline cruel for making cuts right before Diwali, Hinduism's most celebrated holiday. The ruling Congress party said that "a democracy like India cannot have a hire-and-fire policy."

India is in an election year, and jobs have been an important issue. Across the country, political parties backed by farmers and young workers have protested corporate decisions and land deals and often emerged triumphant. In West Bengal state, for example, protesting farmers forced the recent shutdown of a Tata auto factory, built to churn out the world's cheapest car.

Federal aviation minister Praful Patel said he had told Goyal that "in 24 hours, we must find a resolution to this problem; otherwise we in the ministry would certainly not be very happy with the approach of Jet Airways."

"Wisdom has prevailed, and we are all happy," Patel said.

Aviation experts said that taking back the workers will seriously harm efforts to save the airline and that eventually more jobs could be lost.

"In India, staff is not let go unless it's a very, very last resort, and the fact that this even happened for a few days is a real reflection of how very bad things actually are," said Kapil Kaul, chief executive in India for the Center for Asia-Pacific Aviation. "But this sets a bad precedent. The airlines will lose out. The customers will also lose out, and ultimately it's a battle that cannot be won when we look realistically at the financial crisis."

Kaul said the airline would have to increase ticket prices by at least 30 percent to break even.

A 24 percent rise in fuel prices has already caused sharp increases in ticket charges and a decline in air travel. The Federation of Indian Airlines, a trade group, is seeking a $1 billion loan from the government to help carriers survive the global credit squeeze.