Indore: Jet grounded fares double
Indore: Jet grounded fares double

The umbrella body of domestic pilots of crisis-hit Jet Airways on Tuesday threatened to stop flying from April 1 unless there is clarity on the resolution process and salary dues by end of this month. As problems mount at the airline, the National Aviator’s Guild (NAG) also expressed hope that a resolution plan would be reached by month-end. The guild, which came into being almost a decade ago, represents around 1,000 domestic pilots.

What is Jet Airways?

Jet Airways has consistently been one of India’s top three airlines in the past decade. Jet Airways was founded by ticketing agent-turned-entrepreneur Naresh Goyal after India ended a state monopoly on aviation in the early 1990s.

Jet Airways in crisis:

  • Jet Airways defaulted on payment to its debenture-holders–the third default since January–even as airline chairman Naresh Goyal assured the employee of a resolution in the immediate possible time, but said more time is needed to clinch bailout.
  • Goyal, in a letter to the 16,000 staff, said talks with the airline’s strategic partner Etihad Airways and SBI-led lenders are going on.
  • Though Goyal sought more time to clinch the deal, he did not offer a timeline for the same.
  • The UAE flag carrier owns 24 percent in Jet and its board is considering a draft agreement as part of a debt-recast plan being mooted by the airline’s lenders led by SBI.
  • The airline, which has a debt of over Rs 8,200 crore, did not specify what is the quantum of interest due nor quantum of the debt on this particular account.
  • On February 14, its board had approved a bank-led-resolution plan, whereby the SBI-consortium of lenders will become the largest shareholders in the airline and Goyal would exit the management as the chairman and board member.
  • If the resolution plans goes through, banks would convert a part of their debt into 11.4 crore shares for a consideration of Re 1 as per the RBI norms.
  • Since a larger number of planes from it’s over 100-fleet are grounded leading to drastically curtailed operations, the airline is struggling to prevent a nose-dive somehow. Of this, as many as 41 aircraft are grounded for non-payment of lease rentals to lessors.
  • The airline has indefinitely suspended its operations from Abu Dhabi, one of its two global gateways the other being one in Amsterdam.
  • For the past few weeks, its passengers have been venting their ire on social media as its flight cancellations have increased gradually due to the rising number of planes getting grounded.
  • The pilots with other senior staff are to get their full salaries of January and February besides 87.5 percent of the December pay.
  • The acute liquidity crunch has forced it to ground aircraft, shut down stations and delay salary payments to its pilots and engineers along with other senior staff.
  • Civil Aviation Minister Suresh Prabhu asked his officials to call for a meeting to discuss grounding of flights, advance bookings, cancellations, refunds, and any potential safety issues, at the cash-strapped carrier.
  • There are reports that the government has asked state-run banks to bail out Jet Airways for the moment to prevent the airline from going bankrupt.

(Inputs from Agencies)

Free Press Journal