Government calls an emergency meet to discuss financial crisis of Jet Airways

The cash strapped Jet Airways continues to ground, cancel flights. The company facing an acute cash crunch has been reducing its operations.

The Civil Aviation Minister Suresh Prabhu has directed his ministry’s secretary to hold an emergency meeting on the debt ridden Jet Airways after the airline cancelled many flights, and grounded large part of its fleet.

On Monday, Jet Airways engineers’ body wrote to aviation regulator Directorate General of Civil Aviation (DGCA), seeking its intervention in the recovery of their salary dues. The letter also said that non-payment was affecting their psychological condition which, in turn, was a “risk” to the airlines safety.

The Jet Airways engineers body’s statement reads, –

“It has been arduous for us to meet our financial requirements, result of which have adversely affected the psychological condition of Aircraft Engineers at work and therefore the safety of public transport airplanes being flown by Jet Airways across India and the world is at risk.

While the senior management is finding a resolution to be in business, we the Engineers who inspect, troubleshoot and certify the public transport airplanes for its airworthiness are in tremendous stress due to non-payment of salaries on time, since last 7 months. As of now, 3 month’s salary is overdue to us.”

About 41 Jet Airways flights were grounded due to non-payment of lease rentals.

The 24 year old Jet Airways is facing its worst financial crisis. Naresh Goyal who owns a major stake in Jet Airlines failed to convince it’s major investor gulf airline, Etihad Airways to make any further investment. Instead Etihad was ready to sell it’s 24 percent stake to SBI for INR₹ 400 crore.

This means that the airline might not be able to infuse new funds anytime soon to keep it running. Jet have defaulted loans worth hundreds of crores. The airline might just have 15 days before its forced to declare itself bankrupt before the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code. It’s unlikely for the airline to find a new partner within this stipulated time.