The £150 million emergency funding expected by Jet Airways has been shot down to £20 million in the best case scenario, as lenders led by SBI await RBI's fresh norms for debt restructuring after Supreme Court last week struck down the central bank's controversial February 12 circular. Bankers said the funding will enable Jet to part pay dues to agencies such as airports, oil companies and statutory charges. A senior banker said, "This money is meant for crisis management while the bidding process starts."
However, airline sources said that the private carrier is now on the razor's edge as a small funding is unlikely to help the airline live long enough to wait for the bigger infusion that is required. A source in the know said, "They (lenders) are putting in very small amounts only in dire situations like two small banks (not SBI) giving £3.3 million to Jet last Friday when Indian Oil cut off fuel supply. It is a very touch-and-go situation. Whether the airline can afford to wait for the new circular and then emergency funding to flow in or will shut down before that remains to be seen."
The airline is in deep waters with salaries of only highly-paid personnel like pilots, engineers and senior management being delayed in the past few months. The March salary has not been paid to anyone, including the low-rung employees. A source said, "Lenders are waiting for RBI to come out with a similar circular. Till then they may keep giving some oxygen. If the circular takes long or no bidder comes for Jet, then Jet is staring at insolvency and closure."
The airline’s international flights on wide-body aircraft are no longer offering inflight entertainment as the content is licensed and needs to be paid for. Lounge access for premium passengers has been discontinued at many airports. The airline did not comment on this issue.
The Jet management is likely to send a communique to employees on the pay issue. The airline’s pilots and engineers have said they may strike work from April 15 unless the airline “substantially” clears their January, February and March salary dues and gives a firm road map for the remaining amount. Meanwhile, the expression of interest “for change in control and management of Jet” was issued by SBI and SBI Caps and the last date for submission of EOI will be April 10.
