Banks Reportedly Ask Naresh Goyal to Reduce Stakes in Jet Airways

Jet has a debt of more than $1 billion and is struggling to pay salaries, bank dues and for other supplies.

Civil Aviation Minister Suresh Prabhu has directed the aviation secretary to hold an emergency meeting on the carrier’s situation, news agency PTI reported.

(Photo: Reuters)

With clouds of uncertainty looming over the survival of 25-year-old airline Jet Airways, a group of banks has asked the carrier’s chairman Naresh Goyal to reduce his stake to 10 percent from the existing 51 percent, CNBC-TV18 reported on Thursday, 21 March.

Meanwhile, Jet Airways domestic pilots body National Aviators Guild has threatened to stop flying from 1 April, if their salary dues are not cleared by the end of this month. The pilots’ body on Wednesday, 20 March, wrote a letter to PM Modi saying that the airline is on the "verge of collapse" and that they are facing lot of financial hardships without any relief in sight.

As the cash-strapped airline struggles to fix its problems, here are ten pointers to get a hang of the situation:

• CNBC-TV 18 quoted sources to report that that a consortium of state-owned banks want Naresh Goyal to reduce his stakes in the carrier and step down from the position of chairman
• Earlier, Civil Aviation Minister Suresh Prabhu had directed the aviation secretary to hold an emergency meeting on the carrier's situation, in the wake of its reduced operations. According to DGCA, 41 Jet Airways aircraft are currently available for operation. The airline has 119 aircraft.
• Jet has a debt of more than $1 billion and is struggling to pay salaries, bank dues and other supplies as it fights competition, a weakening rupee and rising fuel costs.
• The Directorate General of Civil Aviation (DGCA) has said the Jet Airways' situation is 'dynamic' and there may be further attrition of flights in coming weeks.
• Jet Airways Aircraft Maintenance Engineers' Association (JAMEWA), on Tuesday, wrote to the DGCA) saying that non-payment of salaries had adversely affected its members' psychological condition, which puts the safety of the airline's flight operations at risk.
• The pilots with other senior staff are to get their full salaries of January and February besides 87.5 percent of the December pay.
• Due to drastically curtailed operations, the airline is struggling to prevent a nose-dive somehow.
• Earlier on 18 March, the carrier's Chairperson Naresh Goyal reassured his employees of restoring the “much needed stability.”
• In the letter, Goyal also said talks with the airline's strategic partner Etihad Airways and SBI-led lenders are going on, even as he asked for more time to clinch the deal. Etihad owns 24 percent in Jet and its board is considering a draft agreement as part of a debt-recast plan being mooted by the airline's lenders led by SBI.
• SBI Chairman Rajnish Kumar has said that the bank will do everything possible to ‘keep Jet Airways flying’.

(With PTI inputs)