After the elections. These three words kept cropping up like a refrain in all conversations with employees of Jet Airways, which announced a temporary closure last month. Elections over and results announced, the beleaguered airline’s estimated 12,000 employees now hope that the new government will chalk out a map for the survival of the carrier — and their own.
Not so long ago these employees were a happy bunch, until trouble started brewing last year. “There were a lot of perks working in the aviation industry, with the destinations you end up going to, and the cheaper flight tickets offered to you,” says Deshpreet Singh Vaid, a Jet Airways pilot.
“It was home for all of us,” adds cabin crew Sagarika Roy Chowdhury, whose entire career so far has been with Jet Airways. “And now we are all left without an anchor.”
The airline flew its last flight on April 17, before shutting all domestic and international operations. The company, in a statement to the stock exchange last month, said it was unable to pay for fuel anymore after the consortium of Indian lenders (a group of seven banks Jet borrowed from), led by State Bank of India (SBI), turned down the airline’s request for critical interim funding.
Since February 21, when the airline opted for a banks-led resolution plan, it has been buffeted by several twists and turns, including the grounding of aircraft, the resignation of its founder Naresh Goyal and his wife Anita from the board, a call for bidders and, finally, a temporary shutdown.
As the lenders struggle to find investors to bail out the cash-strapped airline and the existing shareholder Etihad Airways declining to invest anything more than its existing 24 per cent shareholding, employees are attempting to step in. Recently, two employees’ associations — the 800-member Society for Welfare of Indian Pilots (SWIP) and 500-member JAMEVA (Jet Aircraft Maintenance Engineers’ Welfare Association) — requested the consortium of lenders to allow them to bid for the airline. This is not the first time an employees’ association has come forward to bid for a stake in an airline: Indian Pilots’ Guild, an association of Air India pilots, had also bid in 2000 for 40 per cent stake in the airline.
“The contribution from employees would be realised from their future earnings and increased productivity... As per our initial estimate, the contribution of employees group over a hypothetical 5-year Employee Stock Ownership Programme (ESOP) is likely to be upward of ₹4,000 crore. In addition, we are also confident of securing an investment commitment of up to ₹3,000 crore from outside investors,” it said in a letter to the SBI chairperson. The letter was signed by SWIP general secretary Ashwani Tyagi, JAMEVA president Ashish Kumar Mohanty, Jet Airways manager (human resources) BB Singh and Jet Lite senior vice-president (operations) and accountable manager PP Singh.
It is a workable proposition, says PP Singh, who is leading the team negotiating with the commercial arm of the SBI, SBI Caps. The SBI is the principal lender for Jet Airways and has taken the lead in negotiating on behalf of Indian lender banks.
“The overall debt (of Jet) works out to be around $3 billion. Half of that is owed to the banks, and an almost equivalent amount to our vendors. At this point, the company cannot afford more debt, so we are looking at equity options. Perhaps, in another five years, if this works out, the employees can even own a substantial stake in the company, and Jet can be afloat again,” he tells BL ink .
The industry is not convinced. Aviation expert Vijender Sharma, who runs Concourse Consultancy and has advised airports and airlines for 18 years, says Jet’s revival is a difficult proposition. “Even if the airlines comes back, it will be a minuscule version of what it already is,” he says. “With passing time, the company’s revival seems more and more difficult. With its landing slots gone, and international routes distributed, it is going to be a shadow of its former self, even if it comes back.”
Out of 766 landing and take-off slots, 479 were given away till July 15 to Jet’s competitors in April, with most slots going to carriers Indigo and Spice Jet. The Ministry of Civil Aviation, however, says the redistribution is only a temporary measure. Most of Jet’s fleet is in the possession of its lessors, as the airlines defaulted on its loans.
Sharma is doubtful whether the new government would intervene. “I don’t think the government is interested in intervening, and it is not its place to intervene either, considering Jet is a private company. It may open a can of worms, and set a bad precedent, with other industries demanding to be rescued.”
But the employees have not given up hope and they regularly turn up for protests in the hope that the government would step in and rescue the 25-year-old company. Held across cities from Delhi and Mumbai to Bengaluru and Kolkata, the protests are marked by slogans such as “Hear our cry, let 9w fly” and “We fly you around, don’t let us be on ground”.
Ashraf Ali Mohamed, who was a pilot with Jet Airways for 14 years before he quit to join Air India Express after the shut down, said on Twitter that he had never thought he would leave Jet Airways.
“I am who I am because of this magnificent airline,” the Chennai-based pilot wrote.
Other airlines are hiring Jet employees, but at lower pay scales. About 30 per cent of Jet’s existing workforce is said to be looking for other jobs, while the others are hoping that a solution will be hammered out. Mohamed estimates that of the 1,900-odd pilots, over 1,000 have been absorbed in other places.
“I expected the company to come back and recover from its situation and so didn’t quit my job,” says Kanisth Shandliya, a pilot. He, however, finally joined Air Asia last week.
The situation, most admit, is bleak. In the little over a month since operations closed, 30 per cent of its workforce has resigned. Three key top executives — CFO Amit Agarwal, CEO Vinay Dube and company secretary Kuldeep Sharma — resigned earlier this month, in a further blow to the employees awaiting news of Jet’s survival. Salaries in most cases have not been paid since January this year. According to the Provident Fund Commissioner’s office, the number of Jet employees seeking an advance has shot up in the last two months.
Desperate employees are grabbing what they are offered, irrespective of lower ranks or pay packages. But senior staffers are the ones who are the most affected, holds PP Singh.
“While pilots and cabin crew get absorbed, it is the administrative staff and engineers — of whom Jet had a significant number — who are facing difficulties. Even if they are absorbed in different industries, they face a pay cut and a loss of position,” he says.
Meanwhile, employees such as Vaid from Delhi are waiting for a new government to take over. “We all knew that Jet Airways was in trouble, but no one expected it to come down the way it did. We had expected the trouble to blow over, and I’m still waiting to see what will happen before deciding about the future, even though I have offers,” he says.
JAMEWA president Mohanty, along with two of his colleagues, met a joint secretary in the Ministry of Civil Aviation on May 21 and asked for the ministry’s intervention. “He assured us that they are looking into the matter, and would work towards a solution after the elections,” Mohanty says.
With the Hinduja Group announcing that it was evaluating a bid for the airlines, the company’s shares rose after a 45-day slump at the NSE. An Etihad-Hinduja tie-up may be in the works. Consultancy firm McKinsey is advising the airline and banks on a revival plan.
For employees, it could be a lifeline. “You can understand how important the airline is to its people that half its employees are still waiting in the hope that it would, somehow, turn around,” Mohamed tells BL ink .
There was a reason, he adds, why Jet had the lowest rate of attrition in the industry. Salaries were marginally higher than those in other airlines and the work atmosphere was convivial. “I would call it my first home, not even my second one,” he says.
Payel Majumdar Upreti