SBI, other lenders refuse salary fund to Jet Airways employees until bidding process is complete: CEO

Forum Gandhi Mumbai | Updated on April 26, 2019 Published on April 26, 2019

All the efforts of the Jet Airways CEO to secure salary payments seem to have gone in vain. State Bank of India, the lead lender is “unable to make any salary commitments, if at all, until after the bidding process is complete,” Vinay Dube, CEO of Jet Airways, informed his employees in a letter on Friday afternoon.

“We have told them repeatedly that our employees are facing grave hardship owing to non-payment of their salaries and that if this were to continue any longer, our employees would have no option but to find employment elsewhere. Unfortunately, the banks have said they are unable to make any salary commitments, if at all, until after the bidding process is complete. We face this reality despite our best efforts to portray the very real suffering that is being endured by each one of you,” Dube’s letter added.

Last week, Kiran Pawaskar, MLC with NCP and the President of the All India Jet Airways Officers’ and Staff Association had met the management, including Dube. After the meeting Pawaskar had conveyed the management’s message that, “The Jet Airways management will decide in a week whether the employees need to work till May 10 (when a potential investor’s name will be announced) or not.” Jet Airways has 16,000 permanent employees and 6,000 contractual employees.

“While we will continue to support the lender-led bid process in our effort to leave no stone unturned, it pains us to communicate that no clarity or commitment on salaries has been provided by any of our stakeholders,” Dube added.

On Thursday, Pawaskar told BusinessLine that the management was unable to give any update on the salaries. “The management has asked for more time. All their attempts and requests to SBI have been futile so far. When the request of one month’s salary was declined, they asked for 50 per cent of it. That too has not been accepted. The management told us that they have not communicated to their employees whether they need to come to work or not and have left it to them to decide.” He further added that they have approached the Labour Ministry, as well, to discuss the matter.

“While on the one hand, we are being told to preserve the value of Jet Airways during the bid process, on the other hand, with no salary payment, some of our colleagues, who are the very fabric and value of this airline, have no choice but to find employment elsewhere. When we highlight the disappointing irony of this situation to the lenders, we are simply told that this problem is to be addressed by the company’s shareholders, who should and could have agreed on a Resolution Plan a long time ago,” Dube added. So far, according to company sources, 400 people have resigned from the company. According to the source, the company owes over Rs 450 crore in salaries to pilots, engineers and general managers, among other staff members.

“Separately, there have been considerable deliberations in the various board meetings regarding the availability of emergency funding from the Promoter and Strategic Shareholder for payment of salary arrears, with no favourable outcome,” the Jet Airways chief added.

On Saturday, Dube, along with the CFO, Amit Agarwal and other employee representatives had met Arun Jaitley, Minister of Finance. According to Dube, Jaitley had assured that he would request SBI to look into the matter of salary. However, Dube’s letter stated that it had not yielded positive results thus far.

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

Published on April 26, 2019
This article is closed for comments.
Please Email the Editor