Jet might down shutters temporarily as lenders defer decision on funds

Chennai: Jet Airways board, having failed to procure immediate funding might likely consider all options, including a temporary shutdown.

The airlines’ survival remained under serious threat after its lenders on Monday deferred a much-anticipated decision to provide emergency funds to the carrier following a marathon meeting, even as its pilots’ union appealed to the lenders and the Prime Minister to save the airline.

The possibility of Jet Airways shutting down temporarily came to light when chief executive Vinay Dube in an internal communication has said the lenders could not decide on the emergency funding and that the board of the airline will meet today to take a call on the future.

“As you are aware, we have been working with the lenders to secure interim funding for our operations. The interim funding has not been forthcoming thus far, and as a result we have extended cancellation of international operations until 18 April (rpt 18 April). The current status of our engagement with the lenders and other related matters shall be placed before the board tomorrow morning, where the management will seek guidance from the board on the next steps forward. We will keep you updated on all critical developments,” Dube said in a mail.

In a late evening statement, the SBI said the bid process was being vetted by the legal team at SBI Caps and prospective bidders would be shortlisted soon. A meeting between the airline management and its major lender SBI last week also could not take a decision on the fund infusion.

However, reports said the lenders may back the funds if they found their bid attractive, a move that may comes as a blow to Naresh Goyal and shareholder Etihad’s attempts to grab control.

It must be noted that the two submitted separate offers last week with financial bids due to be submitted by the end of the month.

On 25 March, the airline’s board had approved ‘the debt resolution plan’, under which SBI-led consortium would provide an emergency loan of Rs 1,500 crore and in turn acquire majority stake, following which founder chairman Naresh Goyal and wife Anita would leave the airline and pare his stake to around 25 per cent.

But banks have so far only under Rs 300 crore has been disbursed that too in small amounts, citing procedural delays. This left the airline cancelling hundreds of flights as the airline failed to pay the lease rentals. Currently it has just six-seven planes for operations, way below its peak of 123 planes in December.

On the other hand, Jet Airways pilots’ union, the National Aviators Guild had on Sunday deferred a decision to strike from Monday saying that it wanted to give more time to the airline ahead of the lenders’ meeting in Mumbai.

Yesterday, the airline’s pilot union along with engineers and cabin crew members assembled at its headquarters to show their solidarity over salary delays. The airline’s pilots along with engineers and senior staff were last paid for December 2018. This apart, the airline has also defaulted on the March salary of other categories of employees as well.

Pilots’ views
“We were expecting some cash support at Monday’s meeting but the lenders have told the airline that they are not going to provide any funds for now…We are disappointed,” said a source in the pilots’ union, reported the <I>PTI<P>

“If funds don’t come by tomorrow, we apprehend that the airline will not sustain any longer,” he said, adding much will depend on the outcome of Tuesday’s board meeting.

“We would like to appeal SBI to release Rs 1,500 crore funds to help the airline continue operations. We also appeal Prime Minister Narendra Modi to save 20,000 odd jobs at the airline,” vice-president, NAG, Asim Valiani told reporters at the airline’s headquarters in Mumbai.

NT Bureau