The woes of around 20,000 employees of the now-grounded Jet Airways, unpaid for several months, seem to be far from over as the blame game between the lenders and the promoters has begun.
In a letter addressed to Jet Airways employees, airline’s chief executive officer Vinay Dube wrote that the employees are facing “grave hardships due to non-payment of their salaries and if this were to continue any longer, our employees will have no option but to find employment elsewhere.”
In the letter, Dube wrote that the banks said they are “unable to make any salary commitments” until the bidding process is complete.
The banks are blaming the airline promoter’s alleged failure to let go of Jet Airways in time and some other investor in its flight deck. On the other hand, the promoters insist that they have agreed to every condition put forth by lenders so that the airline could receive emergency funding.
Here is Dube's letter to Jet Airways' employees:
Your leadership team has spent the last few days trying to convince the consortium of Indian banks (led by State Bank of India) to release some funds for our employees, while continuing to support the bank led bid process for Jet Airways. Unfortunately, the banks have said that they are unable to make any salary commitments, if at all, until after the bidding process is complete. We face this reality despite our best efforts to portray the very real suffering that is being endured by each one of you.
While on the one hand, we are being told to preserve the value of Jet Airways during the bid process, on the other hand, with no salary payment, some of our colleagues, who are the very fabric and value of this airline, have no choice but to find employment elsewhere. When we highlight the disappointing irony of this situation to the lenders, we are simply told that this problem is to be addressed by the Company's shareholders, who should and could have agreed on a Resolution Plan a long time ago.
Separately, there have been considerable deliberations in the various Board meetings regarding the availability of emergency funding from the Promoter and Strategic Shareholder for payment of salary arrears, with no favourable outcome. We have, as a unified Jet Airways team, also approached the Government at the highest levels to seek intervention and assistance in our situation and that too has not yielded positive results thus far.
While we will continue to support the Lender led bid process in our effort to leave no stone unturned, it pains us to communicate that no clarity or commitment on salaries has been provided by any of our stakeholders.
After flying for 25 years, Jet Airways on April 17 announced temporary grounding of operations after the lenders declined a Rs 400-crore lifeline, putting at stake 20,000 jobs and thousands of crores in passenger refunds, dues to vendors and over Rs 8,500 crore to banks.
Founded by Naresh Goyal, who began as a general sales agent to a host of international airlines with travel agency Jetair, the full-service carrier served tens of millions of passengers for over two-and-half decades, before becoming the seventh domestic carrier to shutter operations in the past five years.
However, the once-premier airline flew into deeper turbulence-second in its history after the 2010 crisis-- after four back-to-back quarterly losses, leaving it gasping for financial breath and forcing it to default on payments to nearly all--from banks to lessors, to employees, and eventually leading to the shutdown from tonight as its fleet strength has crimped to just about five planes from 123 in December last.