Jet crisis: Lenders propose ‘change’ in management

Making all efforts to keep the airline flying, says SBI

New Delhi, March 20

Lenders, led by the SBI, are trying to revive debt-laden Jet Airways by change in management as they feel collapse of the airline will not be good for consumers and competition, a source said after the SBI chief met Finance Minister Arun Jaitley today.

With Jet flying just about a third of its fleet, defaulting on interest payments and delaying salaries to pilots, SBI chairman Rajnish Kumar along with Aviation Secretary Pradip Singh Kharola and Principal Secretary to Prime Minister Nripendra Misra met Jaitley today.

Kumar said the meeting was to apprise the government, which is an important stakeholder, about the happenings in what was once India’s second-biggest airline, and not to discuss a bailout package.

He, however, emphatically stated that it was in the interest of the lenders and consumers to keep Jet Airways flying, and dragging the debt-ridden firm under bankruptcy proceedings is the last option.

Though Kumar refused to share details of the lenders’ resolution plan, the source said that the lenders have proposed to change the management of the beleaguered air carrier as they feel it is not possible to run the company with present management.

Jet Airways is headed by Naresh Goyal, who currently holds 51% stake. Abu Dhabi based Etihad Airways has 24%.

There were media reports that Etihad has approached the SBI to purchase its 24% stake in the airline. On getting a new player in Jet Airways, Kumar said, “No possibility is ruled out”.

“The dialogue with Etihad is on. It is not that they have conclusively decided that they will go out. But there are certain conditions which they want to be fulfilled and it is nothing but that the airline should be professionally managed and without any interference,” he said.

Lenders of Jet Airways have been working on a resolution plan for the past five months and it is almost ready, Kumar said, adding “We will make every effort to keep Jet Airways flying and in no manner it is a bailout for any individual or any promoter whatsoever”.

The SBI chief said resolution of a service industry, like airline, is nearly impossible under Insolvency and Bankruptcy Code (IBC) and is the last option. — PTI


Resolution plan

  • Jet Airways has a debt of over Rs 8,200 crore and needs to make repayments of up to Rs 1,700 crore by the end of March. In case the airline collapses, 23,000 jobs would be at stake
  • A source said the lenders have proposed to change the management of the beleaguered carrier as they feel it is not possible to run the company with present management
  • There were reports that Etihad has approached the SBI to purchase its 24% stake in the airline

Unused slots to be given to others

  • The government plans to provide unused airport slots of Jet Airways to other domestic airlines on an interim basis, a senior official said Wednesday, amid efforts to minimise flight disruptions
  • Jet Airways has grounded at least 47 planes due to non-payment of lease rentals
  • Besides, many aircraft are on the ground due to other reasons
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