In an attempt to salvage Jet Airways , the company’s employees have put forth a proposal to take control of it by infusing ₹7,000 crore. Under a proposal submitted to SBI, the lead lender, the employees plan to put up capital through stock options worth ₹4,000 crore and another ₹3,000 crore raised from external investors.
On April 17, the airline announced a temporary shutdown due to lack of funds.
The employees’ letter, addressed to SBI Chairman Rajnish Kumar, said: “We would like to suggest that Jet Airways be taken over by a consortium of employees and external investor(s)...the contribution of the employee group over a hypothetical over-five-year Employee Stock Ownership Programme (ESOP) is likely to be upward of ₹4,000 crore. In addition, we are confident of securing up to ₹3,000 crore from outside investors.”
The proposal is signed, among others, by Capt PP Singh, Senior V-P (Operations) and Accountable Manager, Jet Lite; BB Singh, Manager of HR, Jet Airways; Asish Kumar Mohanty, President, Jet Aircraft Maintenance Engineers Welfare Association; and Capt Ashwani Tyagi, General Secretary, Society for Welfare of Indian Pilots.
“It is realistic to understand that the employees would not have the cash or credit needed to buy the company outright. The contribution from employees would be realised from their future earnings and increased productivity, a value that can be quantified in advance with a fair degree of certainty,” the letter added.
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Investors approached
According to Tyagi, the employees have already approached some investors. “We are in conversation with other employee unions as well,” he said.
“We have discussed these issues informally with our colleagues in different sections of the company who have reposed their confidence and faith in an employee-led turnaround plan that is modelled on similar turnarounds in the West, like that of United Airlines in 1994,” the letter said.
“This exercise will necessitate a complete overhaul of the management team of the company and re-establishment of priorities of the short, medium and long term. The required investment and other modalities on the financial aspects can be duly deliberated over meetings to ensure complete confidence of the bankers in this unique effort of recreating and establishing a version 2.0 of Jet Airways,” it added.
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