- The sale of stakes is being considered crucial to the future of Jet Airways by its lenders.
- The Union government is playing the revival plan of Jet Airways close to its heart while the banks have shown no interest in infusing funds or revival of the flailing Jet Airways.
- The future of over 15000 employees is uncertain and their employee’s union threatens to approach the Labour Commissioner.
While the government, lending banks and the regulators of civil aviation struggle to discover solutions for the revival of Jet Airways and a quick resolution to the uncertainty of the fate of its large number of employees, India’s 3rd largest civil aviation market shareholder and domestic airline Jet Airways seems to be quietly sinking into a situation of no return.
Who is impacted?
According to Martin Consulting’s Mark Martin, once an airline stops operations, it is assumed it will not restart, as in the case of Kingfisher Airlines who closed down on October 20th, 2012. Very sad indeed! Jet Airways is known for breaking the state’s monopoly in the aviation industry to emerge as the airlines of everyone’s choice including the PM Narendra Modi.
The President, Jet-Airways All-India Staff, and Officers Association, the pilots’ union of Jet Airways and the National Aviator’s Guild (NAG) approached the police over dues in employees salaries and criticized the banks for the lack of infusing 1,500 CR Rs after agreeing to do so. The banks, however, refuted the allegations and stated they never had agreed to it.
The second week of April saw an employee protest in the form of a human chain outside the Jet Airways HQ and Jantar Mantar(New Delhi) to draw the government’s attention to their plight. Many had not received their salaries since January they stated. Unfortunately, the move came at a time when the BJP government was seeking a second term in office and the focus of voters was high on the government’s promises for economic growth and creation of jobs. However, the Narendra Modi led government did come to power and any action by it was just too late!
The AS2 3502 was the last Jet Airways flight on the Amritsar-Mumbai sector before running out of cash to meet even its daily operational expenses. Banks had refused its emergency funds plea of 400 Cr Rs fearing the money could not be recovered later. From 119 flights on its rolls, the giant had lenders, lessors of aircraft, and banks refusing to step in. The SBI led bank-consortium to preferred the bids from investors for a take-over instead.
The operational suspension does not augur well and the major bidders of NIIF, Etihad Airways, PJSC, Indigo Partners and TPG Capital were tight-lipped regarding the huge costs in dues accumulated. Every day counts and when it is a too-little-and-too-late variety of funding, Jet Airways may never recover. The only achievement of the bid process was to determine the Jet Airway’s fair-market-value!
The Regulators stance:
The DGCA, MoCA and such regulators are involved in ensuring the customers do not suffer and all rules on cancellations, refunds, and alternative flight bookings are strictly implemented. Pradeep Singh Kharola- Secretary, Civil Aviation claimed India was deficient by 17 planes and that 30 planes were to be inducted shortly. He stated that Air India was being ramped up and that the carriers had assured the government that the fares would be reasonably maintained. The issue needed to be resolved by the lenders and Jet Airways he felt.
With Kharola allotting the Jet Airways parking slots to other carriers and lending agencies of aircraft appropriating their planes the curtains are down for Jet Airways. The bidding process has failed and the banks are trying to recover their dues. No one is really trying to revive Jet Airways and in all probability, it may never return to its days of glory.
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