Armed with a Rs 1,500 crore bailout plan, the lenders headed by State Bank of India on Wednesday stepped up efforts to keep afloat cash-strapped Jet Airways, India's second-largest airline. A change in management is also on the cards to diffuse the crisis as Chairman Naresh Goyal has been asked to step down.
Goyal holds 51% stake in Jet Airways, while Abu Dhabi-based Etihad has 24%.
Emerging out of a high-powered meeting with Finance Minister Arun Jaitley, Principal Secretary to Prime Minister Nriprendra Mishra and officials of finance and aviation ministries, SBI Chairman Rajnish Kumar said, it was in the interest of the nation and the public that Jet Airways was kept afloat.
He said every effort would be made to revive the airline and the lenders would ensure that it was not put under the Insolvency and Bankruptcy Code (IBC).
Having already burnt its fingers with Kingfisher, this would be a second such attempt by public sector lenders to bail out a private airliner at the cost of taxpayers money.
“It is in the larger interest of the country, public and the lenders that Jet Airways continues to fly. We have not lost all hope and all efforts will be on to keep it flying,” Kumar said.
SBI is also looking at getting a working chairman on board to save Jet Airways.
The bankers were of the view that the current management of Jet Airways did not have the ability to pull through the crisis.
On whether the airline had reached a stage where putting it under IBC was under consideration, Kumar said, “there is no question of IBC for Jet. IBC is synonymous to grounding the airline.IBC will be the last option for the service industry like aviation,” he said.
Only 38 planes of Jet's 119 strong fleet are operational and pilots, who have not been paid since December, have threatened to go on strike from April 1 if the resolution plan was delayed.
Kumar said Etihad continued to be in talks with Jet Airways and it was not conclusive it wanted to exit. Jet Airways shares fell about 6% on Wednesday on the buzz that Etihad wanted to exit.
According to estimates, Jet Airways employs more than 20,000 people.
Meanwhile, the other two big players – IndiGo and SpiceJet – have tried to cash-in on the crisis. Indigo, with almost 49% of total market share, Wednesday announced 14 new flights and SpiceJet was reported interviewing Jet Airways pilots in Mumbai.