Hundreds of employees of Jet Airways werejubilant as they returned to work Friday. Their surprise reinstatementcame just two days after they were fired.
The company had saidthe dismissals were prompted by the need to cut costs, and said thenumber 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.
"Iapologize 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 ofbefore."
Domestic media reports say the company may have changedits decision due to political pressure. The dismissals were the largestever by any airline.
The problems of the sacked employees areover. But experts say the troubles faced by the once-booming aviationsector could deepen in the months to come.
According toindustry estimates, airlines - both private and state owned - willaccumulate losses of $1.5 billion this year.
Thedownturn comes after the aviation sector witnessed frantic expansion inthe last three years. Nearly a dozen new airlines started operations,bought new jets, and cut fares to attract tens of thousands of newfliers 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.
Asa result, passenger traffic, which grew by 40 percent last year, hasplummeted. And there are fears that there will be more empty seats asthe global credit crunch begins to bite India.
The cash-strappedaviation sector now owes state-owned oil companies millions of dollars,and has appealed to the government for a $1 billion loan to tide overthe crisis. But Civil Aviation Minister, Praful Patel, says help willnot be forthcoming.
"There is no bailout package as everybody ismaking out, that government is going to write a check of taxpayersmoney to an airline," he said. "That has never been the case."
Industryexperts say that at least some airlines may shut down, while others maymerge with bigger airlines in a bid to survive the turbulent times.