Jet Airways Planes Grounded by Lessors

Yogesh Sarkar

Administrator
Naresh Goyal has stepped down as Chairman of Jet Airways. Banks have agreed to infuse further Rs. 1,500 crores in to the airline and for that, they will be issued 50.1% shares at Rs. 1 each. With less than 30 of Jet Airways original fleet of 119 planes flying, banks are hoping to recover the money by selling of the company by May end.

-----------------------------

A 28-year journey came to an end on Monday as Naresh Goyal, founder chairman of Jet Airways, finally stepped down following pressure from lenders. By doing so, Goyal may have ensured the survival of the airline as his departure was one of the conditions stipulated by lenders, led by State Bank of India, who will now infuse Rs 1,500 crore of emergency funds.

Lenders agreed to pump in funds as this was the only way to keep the airline operational and give them a chance to recover their dues of over Rs 8,000 crore. The government was also keen that the carrier continue to operate as closure would cause large-scale job losses, severely reduce airline capacity in the country and wipe out any chance of creditors recovering their money.

Although the emergency funds will help Jet Airways continue operations, customers will face disruption for a few weeks as several aircraft have been grounded since the tickets were sold. Of its total fleet of 119 aircraft, less than 30 are understood to be now flying. However, bankers say there will be more certainty for those buying tickets now.

Besides getting Naresh Goyal and his wife Anita Goyal and the Etihad representative to step down from the board, banks have also got the company to issue them 11.4 crore shares for Re 1 each, which makes them the largest shareholders with a 50.1% stake. SBI chairman Rajnish Kumar said the shareholding is temporary, and a buyer will be found by end-May 2019. As the sale is happening out of the bankruptcy process, Goyal is not barred from bidding but this is seen as unlikely as he could not come up with even the Rs 750 crore sought by banks. Etihad, whose stake will be halved to just below 12%, will take a call on bidding for the airline by the month-end.

Lenders wanted the promoters out of the airline to facilitate the entry of strategic investors. Banks decided to invite outside investors after promoters failed to bring in the Rs 750 crore demanded by banks.

“This is a decision the creditors have taken because they have kept legitimate self-interest and public interest in mind. The self-interest of the banking system is that the company must survive so that their investment remains and if it prospers they can get back their money, the debt can be serviced,” finance minister Arun Jaitley told a news conference in Delhi.

Jet board has approved the bailout package and agreed to a proposal by banks to have an interim management committee running the airline until an investor comes in. The airline share price rose 12.7% to Rs 254 on Monday following Goyal’s decision to step down.

Goyal, considered a pioneer in Indian aviation in the post-liberalization era, had begun his career as a travel agent and representative of overseas airlines nearly 50 years ago. He started Jet Airways in 1991 and the airline started flying two years later. It became India's largest airline by passenger market share in 2010 after acquiring Air Sahara in 2007.

This competition from low-cost airlines made it difficult for Jet to raise fares. As a result, Jet reported losses in nine of the last 11 years. The company continued to operate as a full-service carrier even as the market started shifting towards no-frills airlines such as Indigo Airlines and SpiceJet. Jet continued to have steady loyalty among business travellers who had locked into the company’s loyalty programme, which is operated by Jet Privileges, a company-owned by Etihad group.

Last year, Arvind Gupta, trustee of Indian Investors Protection Council, the ICICI Bank-Videocon Industries whistleblower, had, in a complaint to the government, alleged that Goyal had siphoned off funds through related party transactions.

Source: ToI
 

deepam

Super User
Naresh Goyal bailed out. If Jet Airways fails to take off; now Naresh Goyal will not be responsible as he is no longer in the board.
Only time will tell whether Jet Airways bounces back and banks gets their money back! Let us hope for the best for our banks and Aviation sector.
 

Yogesh Sarkar

Administrator
Jet Airways pilots have not get their 4 month salary yet and funds from lenders has not arrived either. So they might be going on a strike from the 1st of April.

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The pilots of Jet Airways will stop flying from April 1, since the airline has not got the interim funding from lenders due to which they have not been told about their four month salary dues. The strike may be averted only if a firm commitment on salary payment is made in next two days and some dues are immediately cleared, say sources.

"Dear Members, a part of the expected interim funding from SBI was supposed to be actioned on Friday (March 29). Unfortunately, the fund transfer has not taken place, hence no update on salary payment from the management. The collective decision of pilots taken at Mumbai and Delhi open house effective April 1 2019 prevails," the National Aviators' Guild (NAG), union of Jet Airways' Indian pilots told members late on Friday night.

A Jet spokesperson said: "Jet Airways would like to clearly state that it has been in constant dialogue with pilots to ensure that the current operating schedule is maintained. The airline remains committed to honor its obligations towards all its employees, including Pilots, AMEs (aircraft maintenance engineers) and members of its senior management, and all other employees who have sacrificed more than their fair share to uphold Jet Airways' values, including safety and the airline's operational reliability."

"The Board along with our lenders, are working continuously towards a strong turn around plan which will enable the airline to restore normalcy to its operations. Jet Airways remains grateful to its pilots, engineers and members of its senior management for their patience and understanding during these trying times. To our guests, we sincerely apologise for any inconvenience caused and would like to assure them that every measure is being taken to minimise the disruption to our operating flight schedule," the airline spokesperson added.

Jet has not paid salary to pilots, aircraft maintenance engineers and senior management of past four months.

On March 25, Jet's founder Naresh Goyal had finally stepped down from airline board and as chairman following pressure from lenders. His exit had facilitated the survival of the airline as this was one of the conditions laid down by banks, led by State Bank of India, that was to infuse Rs 1500 crore of emergency funds. Lenders had agreed to pump in funds as this was the only way to ensure that the airline remains operational and they had a chance to recover their debt of over Rs 8,000 crore. Earlier this week SBI and Jet officials had met the aviation ministry.

"The SBI people said emergency funding will be provided at the earliest after some paperwork is complete," an aviation ministry official had said earlier this week.

Source: ToI
 

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Jet Airways to fly 6-7 aircraft on both days this weekend domestically: Aviation Secy

As the crisis in the private airline deepened, the Prime Minister's Office called an urgent meeting to discuss the situation, an official source said.

[email protected]




Cash-strapped Jet Airways will fly six to seven aircraft on both days this weekend on domestic routes, Aviation Secretary P S Kharola said Friday. He also said the airline has been told to ensure that passenger issues are taken into consideration while it deals with the situation.

It has also been told to alert passengers about flight cancellations 48 hours in advance, Kharola said.

"Jet had a meeting with bankers. It has put forth demand of funds. It is currently flying 11 aircraft and will fly six to seven aircraft domestically on both days this weekend. We have asked it to take into consideration issues of passengers," the aviation secretary said.

Currently, Jet Airways is operating less than 50 domestic flights per day. The official said the airline has suspended its international operations till Monday.






As the crisis in the private airline deepened, the Prime Minister's Office called an urgent meeting to discuss the situation, an official source said.

According to sources, the meeting has been called after Civil Aviation Minister Suresh Prabhu asked the secretary of the department to review issues concerning Jet Airways.

Airfares have been on an upswing across India for the last few weeks due to sharp decline in number of flights primarily caused by grounding of around 90 per cent of the 119-aircraft fleet of the cash-strapped Jet Airways.

Amid this, SpiceJet Friday announced it will induct 16 Boeing 737-800 NG aircraft on dry lease to bring down flight cancellations and expand the airline's international and domestic presence.

The availability of flights was also hit by pulling out of SpiceJet's 12 "737 Max" aircraft in March over safety concerns following an Ethiopian Airlines plane crash on March 10.

"SpiceJet will induct 16 Boeing 737-800 NG aircraft on dry lease and has applied to the Directorate General of Civil Aviation (DGCA) for a no objection certificate (NOC) to import the aircraft," the airline said.

"Subject to regulatory approvals, the aircraft would begin joining SpiceJet fleet in the next 10 days," it added.

First Published on Apr 12, 2019 09:54 pm




 

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Jet Airways to suspend all operations from tonight
Jet ran an operation of 6 planes since morning. The decision was taken in the afternoon.
By
Anirban Chowdhury
ET Bureau
Updated: Apr 17, 2019, 06.47 PM IST

Agencies
Jet's fleet is reduced to just five aircrafts and it has suspended its international operations.

MUMBAI: Troubled carrier Jet Airways has decided to temporarily suspend all flights from tonight, with no cash to run operations any further, said a person in the know.

“We got the information just 10 minutes back. We are still trying to process it,” said a person in the know.

While Jet had been running a bare minimum number of 35-40 flights for the last few days, a total grounding will significantly affect its value for potential investors that are undergoing a bidding process to invest in the airline. Jet’s shares yesterday fell close to 20% on rumours of an imminent shutdown. It closed 8% down at about Rs 242 on Tuesday close. Markets were shut on Wednesday.

There are fears of its licence being subsequently suspended if it doesnt get its flights back up. India’s aviation regulator hasn’t referred to any such action yet.

“There is laid down regulation for each situation. We shall follow what is appropriate for a given one,” a senior official at the Directorate General of Civil Aviation told ET.

Jet ran an operation of 6 planes since morning. The decision was taken in the afternoon.

The move came after Jet’s last ditch attempt to raise interim loans to keep the airline running, failed yesterday evening. CEO Vinay Dube had approached the lenders with an appeal for Rs 400 crore. The banks refused to release any funds without additional collateral.

The grounding had been imminent to the airline’s management for sometime, with the skeletal operations just a soupcon of Jet’s original 124-plane network which made it India’s second biggest flyer of passengers till January.

“It’s an emotional day for us. We just want to focus on taking care of staff and guests,” said an executive.

Jet has defaulted on loans as well as vendor and lessor payments. It has been forced to ground planes since the beginning of the year primarily due to defaults to leasing companies. It hasn’t paid its employees since January.

Meanwhile, its lenders have selected Etihad Airways that owns 24% of the airline, PE investors TPG Capital and Indigo Partners as well as the state-run National Investment and Infrastructure Fund as qualified bidders. They have to submit binding bids by May 10. The process to find a buyer will stretch longer. Jet may not have the time.

Jet, India’s oldest surviving private airline, started in 1993 as an air taxi operator and grew to become its biggest carrier with a premium international network. It faced tough competition in the 2000s from competitors such as Air Sahara, Kingfisher Airlines and several low fare carriers such as IndiGo and SpiceJet.

Jet bought Air Sahara in 2007 for Rs 2,050 crore in a deal which troubled it for years later with additional costs, taxes as well as legal and manpower issues. It faced its first major crisis in 2011-12 and subsequently sold 24% stake to Etihad for $379 million in 2013.

The latest crisis started in March 2018 with delayed salary payments for employees and a 25% paycut for top management. It escalated sharply between January and March 2019 with the airline grounding more than 100 planes.




Jet Airways to suspend all operations from tonight
 
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Yogesh Sarkar

Administrator
Jet Airways has suspended all operations. Looks like last ditch effort is being made to reduce the bidding price for whoever takes off the lot.

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NEW DELHI: After raging against the dying of the light for several months, Jet Airways flew gently into the night on Wednesday— at least for now. India’s longest-serving private carrier shut down operations after a 26-year journey, during which it flew 650 flights a day at its peak. The shutdown leaves a huge question mark over the future of over 16,000 direct and 6,000 contractual employees.

Jet will take to the skies again only if it finds a new buyer who revives it.

“Late (Tuesday) night, Jet was informed by SBI, on behalf of the consortium of Indian lenders, that they are unable to consider its request for critical interim funding… the airline will not be able to pay for fuel or other critical services to keep the operations going. Consequently, with immediate effect, Jet Airways is compelled to cancel all international and domestic flights. The last flight will operate Wednesday,” Jet said in a regulatory filing to BSE on Wednesday night while announcing the temporary shutdown.

The airline had on Tuesday sent a final SOS to lenders for Rs 983-crore emergency funding to remain afloat.

Source: ToI
 

citymonk

Super User
As per DGCA, Jet Airways is currently operating just 41 planes out of its original fleet of 119. Add to that, the pilots are now threatening to go on strike, if they are not paid by 31st March 2019.
My advice to Jet Airways Management is to first clear old salary dues of their employees and immediately after this action stop paying any fixed salaries to them. Their Main Problem is High Salary bill as inspite of low fuel prices Jet is not able let both ends meet.
Staff should be paid on commission basis, depending on collections from particular flight.
Such system will bring efficiency in their operations.
I have seen business model of state owned Haryana, Punjab and Himachal roadways buses, they remain in high profits by following this age old system. On other hand DTC, Delhi Transport Corporation operates on fixed salaries system and is making losses year after year. Plus DTC Drivers and Conductors are always cribbing about low salaries.
While a Haryana Roadways counterpart is always happy.
I have seen Conductors providing Cold Drinks, Water Bottles and Newspapers in some class of buses. Plus Drivers need not be paid daily allowance for food and refreshments e.t.c. they happily collect hard cash and free lunches from halting point eateries falling on that route.
If Jet Airways can operate like Haryana Roadways, but unlike DTC, then they will have no Salary or bonus issues , nor any Fuel price problems.
This way Jet Pilots and crew will always remain Happy, bringing lot of Revenue for management after taking their cuts.
 
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adsatinder

explorer
.
If Jet Airways can operate like Haryana Roadways unlike DTC then they will have no Salary or bonus issues , nor any Fuel price problems.
This way Jet Pilots and crew will always remain Happy, bringing lot of Revenue for management after taking their cuts.
Let's start Dhaba on Air highways !
LOL !
 

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explorer
Jet Airways grounded LIVE updates: Staff union seeks govt intervention
Jet Airways halted operations temporarily from April 17 after banks rejected the debt-laden carrier's request for emergency funding
Top
HIGHLIGHTS
  • Apr 18, 03:31 PM (IST)
    Jet Airways saga: From soaring the skies to being temporarily grounded
    Jet Airways saga: From soaring the skies to being temporarily grounded
    The airline's share was at an all-time high in April 2005 at Rs 1,379 and currently stands at Rs 164. and falling.
  • Apr 18, 03:07 PM (IST)
    No assurance of benefits for employees by management: Jet Airways employee
    Tina John, a ground handling supervisor of Jet Airways said that the management has given no assurance of any gratuity payment, for employees looking to move out. "They are saying the company is going through a bad phase and we have no money to settle any dues."

  • Apr 18, 02:48 PM (IST)

    Sushma Shetty, a ground handling staffer said the problems at Jet Airways have started from October 2018, when sudden flight cancellations began, and it only got worse in February. Shetty said there were instances where ground handling staff were manhandled and abused by passengers, whose flights were cancelled.

  • Apr 18, 02:31 PM (IST)

    UPDATE: Around 22000 other staff and workers related to the vendors of Jet Airways are also impacted. Their payments were also getting impacted. These vendors include caterers, hotels, logistics companies and so on.

  • Apr 18, 02:17 PM (IST)

    Another Jet Airways senior cabin crew staffer said on condition of anonymity that it has been tough. "We don't have too many options right now. We are waiting till May 10, a date on which the potential buyer of Jet Airways will be known," the person said.

  • Apr 18, 02:16 PM (IST)

    Prathamesh B, 27, was a ground handling executive with Jet Airways for five years. He said he hasn't paid is home loan EMI and is being badgered by his bank. He added that getting a new job in other airlines wasn't easy, as they were offering 50 percent lower salaries.

  • Apr 18, 02:10 PM (IST)

    Customer service supervisor at Jet Airways for 7 years hopes for the company's recovery
    Abhasi Amina, a 30-year-old customer service supervisor says she hasn't paid the EMI of her personal loan and has to borrow money from parents in Goa to pay house rent and groceries. Amina has been working with Jet for 7 years and was a top performer in the company. She said Jet Airways always treated well and she hopes for the company's turnaround.

  • Apr 18, 01:54 PM (IST)

    Pilots of Jet Airways were not paid salaries from January onwards. Engineers and senior management were also not paid since three months. The ground handling and cabin crew did not get their March salary: Jet Airways' Officers & Staff Association

  • Apr 18, 01:53 PM (IST)

    Addressing a press conference, Kiran Pawaskar, Leader of Jet Airways' Officers & Staff Association questioned why the State Bank of India (SBI) is dragging its feet after it had offered to lend Rs 1,500 crore on the condition that founder-promoter Naresh Goyal would resignation.

  • Apr 18, 01:34 PM (IST)

    Large section of employees are not being absorbed by other airlines. Crowd funding remains an option to help in this situaion. Charges of corporate war are limited to the hike in fares and not blocking of funding: Jet AIrways staff and officers association

  • Apr 18, 01:31 PM (IST)

    Jet Airways staff association has said that the “crisis is a corporate war” and that the “government needs to think about the repercussion of the crisis” at the carrier.

  • Apr 18, 01:28 PM (IST)

    Kiran Pawaskar, Leader of Jet Airways' Officers & Staff Association has said that 16,000 employees are jobless today. The union has questioned why the airline has not paid salaries before suspending operations.

  • Apr 18, 01:26 PM (IST)

    Jet Airways Ground Staff Union is seeking government’s intervention to avoid the carrier's collapse.

  • Apr 18, 01:25 PM (IST)

    Employees are ready to work. They are experts because they have been working for 25 years. We are not going to run away. Employees will remain here: Jet Airways Ground Staff Union

  • Apr 18, 01:23 PM (IST)

    There are no layoffs. We will continue to claim our salary: Jet Airways’ staff

  • Apr 18, 01:22 PM (IST)

    Jet Airways’ staff is addressing a press conference after the airline temporarily suspended operations.

  • Apr 18, 12:53 PM (IST)
    Jet Airways shutdown: Booked a Jet Airways flight? Here's what you can do
    Jet Airways shutdown: Booked a Jet Airways flight? Here's what you can do
    Cash-strapped airline Jet Airways flew its last flight on the Amritsar-Delhi-Mumbai route on April 17 and announced a temporary shutdown as lenders refused to provide it with the much-needed emergency funding.
  • Apr 18, 12:34 PM (IST)

    Sanjay Manjrekar

    ✔@sanjaymanjrekar

    https://twitter.com/sanjaymanjrekar/status/1118755899642826758

    Not flying @jetairways this IPL is a real pity. A world class airline that made domestic flying a real pleasure....Missing you guys...hope you bounce back soon
    #JetAirways

    3,192

    11:29 AM - Apr 18, 2019
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  • Apr 18, 12:11 PM (IST)

    What is happening at Jet Airways is not a surprise, said Rituparna Chakraborty, executive vice president of TeamLease Services. The crisis had been brewing for the past 15 months and employees were also mentally prepared for this scenario. Many of them had decided to stay back because of pending dues.
    She said that demand in the aviation industry far exceeds the supply. "This is especially true for the ground staff, pilots and flight attendants. So individuals in these profiles may not find it difficult to find jobs. However, those in the corporate offices and non-aviation profiles in the company may find it a little challenging," she added.

  • Apr 18, 12:03 PM (IST)

    Rishi Kapoor

    ✔@chintskap

    https://twitter.com/chintskap/status/1118714222526046208

    My heartfelt wishes for the Jet Airways people. You have served us with utmost love and care. Thank you. Sorry for this chaos. All will be good!

    4,859

    8:43 AM - Apr 18, 2019 · Manhattan, NY
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  • Apr 18, 11:55 AM (IST)
    Why do airlines in one of the fastest growing aviation markets bite the dust?
    Why do airlines in one of the fastest growing aviation markets bite the dust?
    The inevitable has happened, though much sooner than one would have expected. Jet Airways joins a list of airliners biting the dust.
  • Apr 18, 11:46 AM (IST)
    Lenders hopeful of stake sale process
    Lenders have pinned their hopes on the stake sale process that was able to attract four eligible bidders. “Lenders are reasonably hopeful that the bid process is likely to be successful in determining fair value of the enterprise in a transparent manner,” the banking consortium led by the State Bank of India (SBI) said a day after the grounding.

  • Apr 18, 11:11 AM (IST)

    All India Jet Airways Officers and Staff Association will have a meeting with the Jet Airways management at 11.30 AM. Post the meeting, there is a press conference at 12.30 PM.

  • Apr 18, 11:09 AM (IST)

    Jet Airways CEO Vinay Dube on April 17 wrote an emotional letter to the employees of his airline after the management decided to temporarily suspend operations. After a board meeting on April 16, the management had authorised Dube to make one last appeal to the lenders for an emergency funding of Rs 400 crore and take a final call on the future of the airline if they refused.
    "A decision like this is never easy to make, but without the interim funding, which we have been repeatedly requesting for, we are simply unable to conduct flight operations in a manner that delivers to the very reasonable expectations of our guests, employees, partners and service providers," he wrote. "But, tomorrow is another day and tomorrow provides us with new hope, new opportunity and new expectations."

  • Apr 18, 11:04 AM (IST)
    Jet Airways timeline: When and what happened so far
    Jet Airways timeline: When and what happened so far
    Jet Airways announced it will temporarily halt operations from April 17 onward after banks rejected the debt-laden carrier's request for emergency funding.
  • Apr 18, 10:55 AM (IST)

    Ministry of Civil Aviation

    ✔@MoCA_GoI

    https://twitter.com/MoCA_GoI/status/1118531342910627840

    Jet Airways has informed MoCA that it is temporarily ceasing operations. The bank-led resolution process is still underway and expected to end by May 10. During this time, MoCA will support the resolution process within the existing legal and regulatory framework. (1/5)

    136

    8:37 PM - Apr 17, 2019
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  • Apr 18, 10:54 AM (IST)

    Stock Update: Shares of competitors SpiceJet and InterGlobe Aviation (IndiGo) rallied intraday on April 18 after Jet Airways suspended its operations.

  • Apr 18, 10:49 AM (IST)

    UPDATE: Employees of Jet Airways are organizing a peaceful movement at Jantar Manter in New Delhi on April 18 from 2 PM.

  • Apr 18, 10:48 AM (IST)

    Siddharth Jain

    ✔@JainSiddharth_

    https://twitter.com/JainSiddharth_/status/1118570878042804226

    One of the darkest moments in corporate Indian history. People don’t understand what it takes to be an entrepreneur & build India’s finest airline, backbone of our aviation economy, in this most unforgiving Country. Deepest respect for Mr Naresh Goyal & all @jetairways staff

    Jet Airways

    ✔@jetairways

    With deep sadness and a heavy heart we would like to share that, effective immediately, we will be suspending all our domestic and international flight operations.
    More: http://Bit.ly/9WImportantUpdate …


    841

    11:14 PM - Apr 17, 2019
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  • Apr 18, 10:44 AM (IST)
    Competitors poaching Jet's pilots
    Sources said that several ground staff and pilots are being actively poached by budget carriers from India over the last 4-8 weeks. Ever since a shutdown of Jet Airways became inevitable, rival companies have started talks with senior employees to hand them job offers.
    Jet Airways had about 1,400 pilots. Of these, 350-400 have already left and joined rival companies.
    Jet pilots are expected to throng the recruitment drive that SpiceJet is organising for just 150 positions on April 23 in Mumbai and April 24 in Delhi.


Jet Airways grounded LIVE updates: Staff union seeks govt intervention
 

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