Cash-strapped Jet Airways’ Chief Executive Officer (CEO) Vinay Dube said Friday that banks will be unable to make salary commitments to its employees till the completion of the bidding process, reported Reuters.
In a letter to its employees, Dube said that “banks are unable to make any salary commitments, if at all, until after bidding process is complete”. He added that no clarity or commitment on salaries has been provided by any of the company’s stakeholders.
Jet Airways, which has around 23,000 employees, has delayed payment of salaries to the employees, including pilots.
“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 colleague have no choice but to find employment elsewhere,” the letter to the employees stated.
Lamenting in the letter, Dube said when the “disappointing” irony of the situation is highlighted to the lenders, they simply say this problem is to be addressed by the shareholders, “who should and could have agreed on a resolution plan a long time ago.”
On Friday, the airline employees had planned to hold a peace walk towards the venue of Prime Minister Narendra Modi’s election rally at the BKC area in Mumbai, however, it was cancelled at the last minute on request from the police and the state government.
Pointing out that there have been several board meetings with the promoters and the strategic shareholder (Etihad), there was no favourable outcome on the funding and crediting salaries so far.
“We have also approached government at the highest levels seeking intervention and assistance but that too has not yielded any positive results,” he added.
While continuing to support the bank led bid sale process, Dube also said that in the past few days the leadership team is making efforts to convince the lenders to release some funds to the employees.
“We have told them repeatedly that our employees are facing grave hardships owing to non-payment of salaries and that if this were to continue any longer, our employees will have no option but to find employment elsewhere. Unfortunately, the banks have said they are unable to make any salary commitments, until after the bidding process is complete,” he said.
A day after the airline suspended operations, hundreds of employees had gathered in the national capital seeking measures to revive the carrier, which has been in operation for nearly 26 years. Domestic lenders have invited bids for selling stake in Jet Airways. On April 18, the lenders said they were “reasonably hopeful” that the bidding process for the airline would end successfully.
Jet, which previously had a fleet of around 120 largely Boeing Co planes, was forced to indefinitely halt all flight operations on April 17 after its banks rejected the carrier’s plea for emergency funds.
Its grounding has had a big impact on the domestic market, with inter-city airfares to major cities such as New Delhi, Mumbai, Bengaluru and Kolkata soaring more than 20 per cent in May and June, according to Yatra.com.