Cash-strapped Jet Airways fails to pay December salary to more employees besides pilots, engineers

Mumbai: After defaulting on payment of salary to its senior management along with pilots and engineers, loss-making carrier Jet Airways has now failed to disburse the December salary to some other categories of employees as well, a source said.

The airline has not paid salaries of managerial employees and those above for December, the source said.

The Naresh Goyal-controlled Jet airline, which is part-owned by Gulf carrier Etihad, has not been paying on time to about 15 percent of its over 16,000 employees since August last year due to a liquidity crunch.

When contacted, a Jet Airways spokesperson did not give a direct reply.

 Cash-strapped Jet Airways fails to pay December salary to more employees besides pilots, engineers

Representational image. Reuters

"Jet Airways would like to clarify that except for informed groups, all salary payments are up to date," the spokesperson said, without elaborating on who falls in the "informed groups".

Meanwhile, the airline is close to reaching a deal with State Bank of India for a fresh loan of 15 billion rupees ($215 million) to meet its working capital needs, two sources aware of the matter told Reuters.

The airline has scheduled a meeting on 8 January with its vendors and lessors, many of whom are getting increasingly concerned over non-payment of dues, and officials from State Bank of India (SBI) to discuss the debt restructuring plan, the first source with direct knowledge said.

The bankers are being called to the meeting to reassure the creditors, some of whom are expected to come to India from overseas, that Jet is working toward securing funding and has a repayment plan which it will share with them, said the first source.

Jet, India’s biggest full-service carrier by market share, owes money to pilots, lessors, banks and vendors. Its problems have been exacerbated by higher oil prices and intense pricing competition in the domestic market.

The airlinewas in talks with the Abu Dhabi-based carrier to infuse more equity, but any money would be conditional on Jet’s founder Naresh Goyal ceding control, sources have told Reuters.

Lessors have already forced the airline to ground at least four of its new fuel-efficient Boeing 737 MAX aircraft over non-payment of dues, the first source said, adding more planes could be grounded if lessors are unconvinced by the plan Jet presents next week.

Jet did not respond to various Reuters queries for this article but late on Friday, after the story was published, a company spokesman said none of its 737 MAX planes have been grounded.

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Updated Date: Jan 07, 2019 07:31:56 IST


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