Previous financial obligations of Jet Airways continue to surface, with a tribunal ordering its new owners to clear the provident fund and gratuity dues of its employees. The airline is in the process of starting operations sometime this year but is also simultaneously navigating the tricky financial liabilities from its past.

Ordered to compute dues "within a month"

The National Company Law Appellate Tribunal (NCLAT) of the Indian government has directed the owners of Jet Airways – the Jalan-Kalrock consortium – to clear unpaid provident fund (PF) and gratuity dues of its former employees.

The National Company Law Tribunal (NCLT) approved the resolution plan of Jet Airways in June 2021, allowing the carrier to restart its revival process. Jet's new owners had also come up with a plan in December to gradually pay off creditors over the next few years. Back then, they were confident of quick progress and hoped to relaunch the airline early this year.

Get the latest aviation news straight to your inbox: Sign up for our newsletters today.

But after petitions were filed by the associations of workmen, Aircraft Maintenance Engineers, Officers and Staff Association, and others, the NCLAT, which hears appeals from the orders of the NCLT, has asked the airline "compute the payments to be made to workmen and employees within one month from today."

It also added,

“Successful resolution applicant is directed to make payment of unpaid provident fund to the workmen till the date of insolvency commencement, after deducting the amount already paid towards the provident fund in the resolution plan to the workmen.”

The order dictates that gratuity and PF amount will be calculated till 20.06.2019, the date of admission to insolvency.

The story so far

Jet Airways' new team has been hard at work to restart operations, but the plan has met with some delays. Among the many issues the carrier is dealing with includes its past financial obligations, as it still owes money to several lenders who want assurances regarding their funds.

In July, the group of lenders, led by one of India's leading banks, even threatened the carrier with insolvency if it did not pay them the proceeds from rentals of its aircraft. But during recent talks with the stakeholders, Jet agreed to infuse more capital into the business to get operations up and running again.

There have also been reports of unresolved negotiations between the carrier and engine and aircraft makers, which are further delaying the launch plans. Jet reportedly wants engine makers Pratt & Whitney or CFM to bear a larger share of the costs whenever an engine is replaced. New engines like P&W's GTF and CFM's Leap are replaced more frequently than their predecessors, especially in the environmentally harsh conditions in India.

Check out more Indian aviation news here.

But recently, images of an Airbus A320 aircraft in Jet's livery and reports of a possible lease agreement for the plane (denied by Jet) have revived hopes that even with delays, the carrier is inching towards a relaunch sometime later this year.

What do you make of Jet Airways' situation? Please leave a comment below.

Source: Moneycontrol