The Jet Airways pilots union, the National Aviator’s Guild (NAG), on Tuesday moved Supreme Court with a plea that the banks and lenders should be directed to release the interim funding to Jet Airways, which could help the airline restart operations.
The union said even the other decisions like allotment of slots, seats under bilateral agreement and de-registering of aircraft and giving them off to other airlines are have been taken without having regard for future of 22,000 employees of Jet. “The value of Jet Airways has been deliberately eroded during the bidding process which should not have been done,” it said.
“The livelihood of employees are directly affected and the respondents are taking steps prejudicial to the company. If the present situation continues there will be no option but to liquidate the company,” the NAG said. The civil aviation ministry, aviation regulator, Jet Airways and airport operators are the respondents to the petition.
Business Standard has seen a copy of the petition.
A letter written by SBI to the chief executive officer of the airline, Vinay Dube, is also part of the petition.
According to the letter written by SBI on April 16, inordinate delay by Jet Airways’ management in creating security in favour of the bank was one of the primary reasons the bank could not agree to release the Rs 1,500-crore interim funding as requested by the airline.
Jet Airways suspended operations on April 17 as banks refused to release funds. Jet has not paid staff salaries and vendor dues for several months. It was observed that even after the firm’s board meeting of March 25, 2019, there was an inordinate delay in creating security in favour of the bank. While a portion of the security has just been completed, the security over the other aircraft is yet to be created, SBI said.
SBI is the lead banker of the consortium of lenders to Jet. Lenders were supposed to receive majority stake in the airline and give Rs 1,500 crore as interim loans.
In its April 16 letter, the bank was responding to a letter written by Dube on the same day requesting interim funds. In its reply, SBI has squarely blamed the precarious situation of the airline on the significant delays made by the company and its management in finding a solution.
The lenders have been continuously supporting the airline despite defaults that have occurred to various shareholders in the past nine to 10 months, and creditors in the past four months, SBI said. However, the lenders have been proactive in extending necessary support to the firm throughout this period, the bank added. Rejecting Jet’s request for funding, SBI said owing to the delays, many aircraft had been ground, which resulted in mounting losses. The position is such that hardly any cash flow is coming to the accounts of the lenders. The lenders are, therefore, unable to consider Jet’s request, SBI said. Since the bidding process for the firm is likely to get over by May 10, it is critical that Jet ensures that no stakeholder takes any step that affects the bidding process, SBI said.
With inputs from Aneesh Phadnis