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India's Largest Private Airline Reinstates Sacked Employees


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.