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Rediff.com  » Business » Jet lenders still undecided on funding; board to meet on Tue

Jet lenders still undecided on funding; board to meet on Tue

April 15, 2019 20:32 IST

The interim funding has not been forthcoming thus far, and as a result Jet has extended cancellation of international operations until April 18.

Jet Airways' 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.

 

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 on Tuesday 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 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 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.

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 per cent.

Citing procedural delays, banks have so far disbursed only under Rs 300 crore that too in small amounts.

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.

A meeting between the airline management and its major lender SBI last week also could not take a decision on the fund infusion.

"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 to 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 in Mumbai.

Photograph: Reuters

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