Jet Airways CEO asks govt for Rs 175 crore to pay one-month salary to staff

CEO Vinay Dube says retaining employee and key airport slots primary for a sale

Jet Airways management has asked the government to release Rs 175 crore to pay one-month of salary to its staff. The airline also asked to retain prime airport slots to retain value for new investor.

A team of employee representatives led by CEO Vinay Dube and Deputy CEO Amit Agarwal later in the evening met Finance Minister Arun Jaitley and requested for Rs 175 crore, which would be used to pay one month salary to the employees.

"We requested for funds to pay at least one month’s salary and that will give hope to employees," Jet Airways CEO Vinay Dube told Business Standard.

However, Jaitley did not promise anything and said that he would forward the request to banks.

Civil Aviation secretary Pradeep Singh Kharola was also a part of the team.

The airline shut operations on April 17 as banks refused to release emergency funding of Rs 400 crore.

The lenders consortium refused to release money as they felt they don’t have enough collateral to extend further credit.

Asim Valiani, Vice President, National Aviator's Guild, who was part of the team, said that airline's asset, like the Boeing 777 planes, can be kept as collateral to release the amount. " With that one month salary can be paid to the employees," Valiani said.

Jet Airways has defaulted on a loan of EXIM bank through which the aircraft were bought. This is the reason why Indian banks are unable to treat the planes as collateral.

Valiani said they also requested to protect prime airport slots of Jet Airways to give confidence to new investor that operations can be resumed immediately.

The government has started distributing Jet Airways slots temporarily to other airlines. Jet will have the right to retain these slots if it can resume operations in six months.

"Banks were unable to release emergency funds we had sought. But right now it's important to pay the salary of the employees and protect airport slots to create value for the new investor and also for the banks," Dube said.

Dube said that the bank's had their own reasons and rules due to which they couldn't release money. 

"Banks have their own commitments and consideration when asked about why banks did not agree on release of loans earlier. Let's focus on future and not on past, " he said.

The employee members also asked to expedite the sale process. "We were told that there were serious bidders," Dube said.

SBI led consortium has called for bids for up to 75 per cent of the company. However, with the Supreme Court striking down a key circular which had allowed banks to convert the airline's debt into equity, there is uncertainty how much of the stake can actually be sold.