Jet crisis: Banks meet, no word on funding yet

Jet crisis: Banks meet, no word on funding yet

Jet Airways pilots and engineers assemble outside the Jet headquarters to express solidarity with the management and to request lenders to release the funds, in Mumbai, Monday April 15, 2019.The airline is operating just 6-7 planes, with almost its entire fleet being grounded due to non-payment of rentals to lessors amid severe paucity of cash. PTI

Jet Airways' survival remained under serious threat after its lenders 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.

Jet Airways 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 Tuesday to take a call on the future.

Jet Airways has only seven planes, including six turbo propelled ones used for shorter hauls, flying at present, way below its peak of 123 planes in December.

"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 April 18.

"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.

Jet Airways pilots' union, the National Aviators Guild had Sunday deferred a decision to strike from Monday saying that it wanted to give more time to the airline ahead of the lenders' meeting here.

On March 25, 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 percent.

But banks have disbursed only under Rs 300 crore in small tranches, citing procedural delays. This left the airline cancelling hundreds of flights as the airline failed to pay the lease rentals.

"Necessary support to facilitate the (Jet Airways resolution) process is being extended by the banks in the consortium. Cooperation by and support from all the other stakeholders will be the key to the success of the process," a statement from the lead lender SBI said.

It, however, was silent on whether the pilots' immediate demand to release the proposed Rs 1,500 crore is being disbursed.

The bank said it is acting on behalf of others in the consortium. On the bid process, it said a prospective bidder will be shortlisted shortly by its i-banking arm SBI Caps.

However, the pilots were clearly disappointed.

"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.

"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 the Tuesday board meeting.

Earlier in the day, 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.

"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," NAG vice-president Asim Valiani told reporters at the airline's headquarters here.