Finally, Jet Airways grounds itself; leaves 20K jobs at stake
Mumbai: After flying for 25 years, Jet Airways Wednesday announced temporary grounding of operations after its lenders declined a Rs 400-crore lifeline, putting at stake 20,000 jobs and thousands of crores in passenger refunds, dues to vendors and over Rs 8,500 crore to banks.
Founded by Naresh Goyal, who began as a general sales agent to a host of international airlines with travel agency Jetair, the full-service carrier served tens of millions of passengers for over two-and-half decades, before becoming the seventh domestic carrier to shutter operations in the past five years.
However, the once-premier airline flew into deeper turbulence -- second in its history after the 2010 crisis -- after four back-to-back quarterly losses, leaving it gasping for financial breath and forcing it to default on payments to nearly all, from banks to lessors, to employees, and eventually leading to the shutdown from Wednesday night as its fleet strength has crimped to just about five planes from 123 in December last.
"Since no emergency funding from the lenders or any other source is forthcoming, we will not be able to pay for fuel or other critical services to keep the operations going.
"Consequently, with immediate effect, we are compelled to cancel all our international and domestic flights temporarily. The last flight will operate today," Jet Airways said in an evening statement.
The troubles at Jet sent airfares soaring and its pains were the gains for rival carriers like IndiGo and Spicejet which took over most its slots at premium airports. The formal grounding announcement will lead to exponential spike in airfares amid the peak summer travel demand.
Under a debt resolution plan approved by the airline's board on March 25, Goyal agreed to cede control to the lenders consortium and also resigned from the chairmanship. His wife, Anita, too quit the board. He had also agreed to halve his stake in the airline to around 25 percent.
But the April 2 Supreme Court order quashing the February 12, 2018 RBI circular (which ended all debt recast plans even on a one-day default) put paid to the resolution plan as banks were left with no leeway to restructure the loan and pay the promised Rs 1,500 crore interim funds which would have been converted into equity at Re 1 a share and also take over the management control.
Before its last flight tonight from Amristar to Delhi, Jet's fleet diminished to just five aircraft and 37 flights from 123 planes and some 650 daily flights till December last.
"This (temporary grounding) decision has been taken after a painstaking evaluation of all alternatives that were made available to the airline and after receiving guidance and advice on the same from the board," the airline said, adding it has informed the civil aviation and finance ministries besides the regulator DGCA, of its decision.
The carrier, however, said it will now await the bid finalisation process by the lenders.
Earlier this month, SBI Caps, on behalf of the lenders, had invited bids for selling between 32.1 per cent and up to 75 per cent stake in the airline and the bids were open from April 8 through 12 after a two-day extension.
The airline said the expressions of interest were in and bid documents were issued to the eligible recipients Wednesday. Banks Tuesday identified four bidders -- Etihad Airways, the national investment fund NIIF, private player TPG and another fund house Indigo Partners as eligible bidders who have time till May 10 to submit the final financial bids.
"We are actively working to try and ensure that the bid process leads to a viable solution for the company," the airline said, adding it will continue to support the bid process initiated by the lenders.
"However, we must also be realistic that the sale process will take some time and will throw up several more challenges for us, many of which we don't have the answers as of today," chief executive Vinay Dube said in a communication to the employees.
"For example, we don't have an answer today to the very important question of what happens to the employees during the sale process," he said.
Meanwhile, JetPrivilege, the company that handles Jet's loyalty programme JPMiles, in a statement said, "We would like to assure our members that the value of their JPMiles are secure and remain intact as members still have the choice to redeem their JPMiles to fly free across more airlines and destinations anywhere."
Meanwhile, the Ministry of Civil Aviation (MoCA) said Wednesday it will support the resolution process within the existing regulatory framework.
In its first reaction on the latest Jet Airways development, the ministry also said that the DGCA and other regulators are monitoring the situation carefully to ensure that all existing rules regarding refunds, cancellations, and alternate bookings are followed strictly.
Let the Truth be known. If you read VB and like VB, please be a VB Supporter and Help us deliver the Truth to one and all.
UDF leaders see local body poll trends as pointer to 2026 Assembly elections in Kerala
Thiruvananthapuram (PTI): Buoyed by the strong performance of the Congress-led UDF in the local body polls, KPCC president Sunny Joseph said on Saturday that the front's results indicated the people had rejected the LDF government.
According to early trends, the UDF was leading in more grama panchayats, block panchayats, municipalities and corporations than the LDF.
The local body polls were held in two phases in the state earlier this week.
ALSO READ: Cong candidate who moved Kerala HC for name reinstatement in voter list, wins
Speaking to reporters here, Joseph said the people of Kerala had extended their support to the UDF.
"We could expose the LDF government’s anti-people stance and the people understood it. The LDF’s fake propaganda was rejected by the people. The UDF is moving towards a historic victory," he said.
He said a united effort, proper preparations, good candidate selection and hard work had resulted in the Congress and the UDF’s victory in the elections.
Asked about the prospects in the Thiruvananthapuram Corporation, Joseph said the party was studying the matter and would comment later.
LDF convenor T P Ramakrishnan said the results would be closely examined.
According to him, the government had done everything possible for the people.
"Why such a verdict happened will be examined at the micro level. People’s opinion will be considered and further steps will be taken," he said.
He added that decisions would be taken after analysing the results. "If any corrective measures are required, we will initiate them and move forward," he said.
AICC leader K C Venugopal said the results showed that people had begun ousting those who, he alleged, were responsible for the loss of gold at Lord Ayyappa’s temple.
"This trend will continue in the Assembly elections as well. It is an indication that the people are ready to bring down the LDF government," he said.
Venugopal said the UDF had registered victories even in CPI(M) and LDF strongholds.
"I congratulate all UDF workers for their hard work. Congress workers and leaders worked unitedly," he said.
Referring to remarks made by Chief Minister Pinarayi Vijayan against the Congress on polling day, Venugopal said the voters had responded through the verdict.
"I do not know whether the chief minister understands that the people are against him. Otherwise, he does not know the sentiment of the people. The state government cannot move an inch further," he said.
He said the results indicated a strong comeback for the UDF in Kerala.
Asked whether the Sabarimala gold loss issue had affected the LDF in the local polls, Venugopal said the CM and the CPI(M) state secretary did not take the issue seriously.
"We took a strong stand on the matter. The BJP played a foul game in it," he alleged.
On the BJP's role in the local body elections, Venugopal alleged that the party operated with the CPI(M) 's tacit support.
"The CPI(M) supported the central government on issues such as PM-SHRI, labour codes and corruption in national highway construction. The CPI(M) is facing ideological decline, and the state government’s policies are against the party’s own decisions," he said.
Meanwhile, LDF ally Kerala Congress (M) leader Jose K Mani said the party could not win all the wards it had expected in the elections.
He congratulated winners from all parties and said the party would closely examine the losses and identify shortcomings. "Later, we will take corrective measures," he added.
Senior Congress leader and MP Rajmohan Unnithan said the trends in the local body elections indicated that the UDF would return to power in the 2026 Assembly elections.
"We will win 111 seats as in 1977 and return to power in 2026. The anti-government sentiment of the people is reflected in the elections," he said.
Unnithan said the people were disturbed and unhappy with the present government.
"The trend indicates the end of the LDF government," he added.
CPI(M) MLA M M Mani said the people had shown ingratitude towards the LDF despite benefiting from welfare schemes.
"After receiving all welfare schemes and living comfortably, people voted against us due to some temporary sentiments. Is that not ingratitude," he asked.
Mani said no such welfare initiatives had taken place in Kerala earlier.
"People are receiving pensions and have enough to eat. Even after getting all this, they voted against us. This is what can be called ingratitude," he said.
Muslim League state president Panakkad Sayyid Sadiq Ali Shihab Thangal said the results were beyond expectations.
"The outcome points towards the Secretariat in Thiruvananthapuram, indicating that a change of government is imminent. We are going to win the Assembly election," he said.
