Jet Airways in financial turbulence

Jet Airways in financial turbulence

FILE PHOTO: Jet Airways aircraft stand on tarmac at the domestic airport terminal in Mumbai. Reuters

Facing cash crunch, Jet Airways is learnt to have approached a consortium of banks seeking Rs 5,000 crore even as a US-based firm is exploring possibilities of buying stakes in its loyalty arm.

Saddled with a debt of around Rs 11,000 crore from banks, the airline's promoter Naresh Goyal met Civil Aviation Secretary R N Choubey last Monday to brief him about the crisis. While Goyal holds the majority stake, Etihad Airways holds 24% stake in the airline.

The airline management had deferred its quarterly earnings report after auditors had objections to certain parameters.

Though the airline did not comment, sources said Jet Airways has approached the consortium for money as its cash reserve has dipped. This money could be used to pay foreign lenders from whom the airline has pledged its aircraft as well as help it in tackling the present liquidity crunch.

The airline had plans to cut the salary by 25% of pilots and other senior staff while the top management has already done it.

The issue of pay cuts had raised questions from shareholders at the Annual General Body Meeting. Chief Executive Vinay Dube told them that the carrier was working very diligently and implementing a mission plan that looked at every element of structuring from cost perspective, including the payrolls.

The pilots' union of Jet Airways also sought details of the turnaround strategy, including the various cost-cutting measures and the fund utilisation. Jet Airways has said that it has a transparent and open culture, and employees as well as the management regularly engage to discuss matters of mutual concerns through different platforms.