The fate of revival of Jet Airways once again plunged into air pocket when the airline’s CEO Vinay Dube on Friday wrote to the employees expressing his frustration over inability to pay their salaries as the lenders continue to deny any interim funds. Dube has basically expressed his doubts regarding the airline’s ability to preserve whatever value it is left with in the absence of release of interim fund by the banks.

“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,” Dube has written.

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He has written that the lenders have flatly refused to release any funds for salary commitments and have asked them to wait for the outcome of the sale process. The bidding round involving four shortlisted suitors — Jet’s equity partner Etihad Airways, India’s sovereign wealth fund NIIF, US-based TPG Capital and Indigo Partners — is expected to be finalised by May 10.

According to Dube, the management has been requesting the consortium of banks led by State Bank of India for the last few days to release some funds for employees. He pointed out that employees will have no other choice but to leave the beleaguered carrier which would severely deplete the value of Jet for shortlisted buyers.
“We have told them repeatedly that our employees are facing grave hardships owing to non-payment of their salaries and that if this were to continue any longer, our employees will have no option but to find employment elsewhere,” Dube has written.

The full-service carrier announced the temporary suspension of all operations from April 17 after it ran out of funds.
There is a growing apprehension that the shortlisted bidders may walk away as the carrier’s prime slots are being allotted to rival airlines leaving nothing for the new buyer.

Recently, Jet had written to the ministry of civil aviation for safeguarding international flying rights of the carrier. Lenders too had expressed concerns about swift transfer of domestic airport slots to rival carriers.

While Jet’s domestic slots have been alloted to rival carriers for an interim period of three months, landing and take-off slots at international destinations are under threat of being taken over by other airlines. Several of its aircraft have been de-registered by lessors for non-payment of dues. Low-cost carrier SpiceJet will induct around 40 planes of Jet, including Boeing 737 NGs.A Jet’s employees union had also requested the government to protect the airline’s slots and fleet in order to remain a lucrative buy for the potential suitors.

The management’s attempts to draw emergency funds from promoter Naresh Goyal and strategic shareholder Etihad Airways for payment of salary arrears have also failed.
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“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,” Dube has written.

Jet had a domestic market share of 15% before it got engulfed in trouble leading to grounding of aircraft. Its flight share on top-10 city pair routes was much higher at 24%. Jet accounted for a solid 14% of India’s international airline capacity share before disruption.