Jet Airways has now deferred the payment of March salaries to its employees. Earlier, only the top management, pilots and engineers were affected due to the salary delays.
The airline's pilots have threatened to go on strike from April 15 if their salaries, that have been pending since January, are not paid along with interest. The company has over 16,000 employees on its payrolls.
The lenders to the cash-strapped carrier had recently approved immediate funding of Rs 1,500 crore. Though the airline's management has not specified the payment date, it said the employees will be updated on April 9. "In light of the current situation, please note that salaries for March 2019 will be deferred," Jet Airways chief people officer Rahul Taneja said in a communication to the staff on Wednesday.
The analysts claim that the situation can soon get out of hand for Jet Airways if the fund infusion does not happen on an immediate basis.
On March 25, Jet Airways's Board had approved a resolution plan formulated by State Bank of India-led domestic lenders, under which they had agreed to infuse an emergency funding of Rs 1,500 crore into the airline, and convert the same into equity worth 50.1% for a notional value of just Rs 1 each share. However, the funds are yet to be disbursed as legal formalities are still being worked out, sources in the civil aviation ministry said.
Founder-promoter Naresh Goyal, who stepped down from the Board as well as chairmanship last month, was quick to send a letter to the employees on Wednesday. "To this end, I have conscientiously taken some hard personal decisions. In extending my fullest respectful cooperation to the consortium of Indian lenders, I have agreed to each and every terms and condition laid out by them in a timely manner. I have given all facilitation for implementation of "resolution plan" and signed on the dotted line as required to ensure release of much-needed funds committed by the lenders, in order to secure a sustainable future for Jet Airways".
Meanwhile, sources said that Goyal, in the last ditch effort, has also reached out to the diamond traders in Belgium, seeking funds to bail out the airline. Those approached include a well-known diamond manufacturing corporation family, though it could not be independently verified by DNA Money. The airline and the lenders are said to have already reached out to several prospective companies and investors including Tata Group, Adani Group and US-based private equity investor TPG Capital in the last few days.
Meanwhile, Jet Airways continues to ground its aircraft amid the delay in fund infusion from the lenders. As per civil aviation secretary Pradeep Singh Kharola, the Mumbai-based carrier is currently operating 28 planes, including 15 aircraft in the domestic segment, which is a third of its total fleet strength of about 119.
Earlier on Wednesday, Kharola said less than 15 aircraft of Jet were flying, which raised questions over the airline's international flying rights.
The Indian aviation rules mandate that an airline needs to have at least 20 aircraft in operations before it could be allowed to fly internationally. Ironically, Goyal was highly in favour of this rule, which critics claim was a ploy to put hurdles in the entry of new players. Jet Airways, on the other hand, claim that it is compliant with the regulatory guidelines.
(With inputs from PTI)