Jet Airways' fate hangs in balance as lenders defer emergency funding, board to meet today

The crisis surrounding Jet Airways sustained on Monday after its lenders on Monday deferred a decision to provide emergency funds to the debt-ridden carrier, which the SBI-led consortium had promised after taking over the airline following the exit of Naresh Goyal.

Meanwhile, the airline extended the suspension of its services on overseas routes till April 18 the decision was taken following the non-receipt of funds from its lenders, who have now management control of the airline following a debt-restructuring plan last month.

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The airline has only seven planes in the fleet with six of them regional jets ATRs and one B737 now. Rest of the planes in its fleet of 123, is on ground due to non-payment of rentals to the lessors and lack of cash to purchase jet fuel.

Jet Airways chief executive Vinay Dube in an internal communication 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. 

During the marathon meeting, the National Aviator’s Guild, which claims the support of around 1,100 pilots belonging to the Jet Airways, requested the lenders to release the funds and also urged Prime Minister Narendra Modi to save around 20,000 jobs at the ailing airline.

The NAG 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.

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 so far disbursed only under Rs 300 crore and that too in small amounts, citing procedural delays. 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 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.

(With inputs from agencies)