Jet Airways' plans for a relaunch have received another setback, with reports of many of its employees exiting the company as it tries to resolve its differences with lenders. Jet's winning bidder, the Kalrock-Jalan consortium, has been trying to resurrect the airline but has missed this year's target of restarting operations in September-October.

Employees reportedly quit

According to a report by CNBC-TV18, some of Jet Airways' senior management, pilots, and crew members have left the company, as its path to restarting operations remains blocked with hurdles.

Jet Airways airplanes in Hong Kong
Photo: Nutkamol komolvanich | Shutterstock

People aware of the matter have said that some top-level exits include heads of engineering and employees from the human resources department. The report states that the airline's CEO and CFO have both taken pay cuts, and its vice president of in-flight services has been sent on leave without pay.

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Many other mid-level employees are also on reduced pay or leave without pay, and some have reportedly joined other airlines. Jet's CEO Sanjiv Kapoor did confirm to CNBC-TV 18 about some employees being on reduced salaries, and, in a separate tweet, said that two-thirds of its staff have not been impacted at all.

Jet Airways Airbus A330 aircraft at Delhi Airport
Photo: Yatrik Sheth | Shutterstock

Tussle with lenders continue

Jet Airways' resolution plan was approved by India's National Company Law Tribunal (NCLT) in June 2021, but many differences have surfaced between the winning bidders and Jet's lenders over the last year.

The Kalrock-Jalan consortium is keen on formally taking ownership of the carrier but has not been able to do so due to resistance from the lenders and previous employees. After a recent hearing, in which the consortium attempted to get ownership of Jet, the NCLT has reserved its decision.

Both parties involved (Kalrock-Jalan consortium and the lenders) are claiming that the other is trying to modify the terms of the resolution plan, as agreed upon originally.

Jet Airways Boeing 777
Photo: photosounds | Shutterstock

Jet has also been unable to sell some of its assets, such as its Boeing 777 aircraft, as an airline union is trying to stop the sale of these aircraft until Jet clears its former employees' provident fund and gratuity dues.

Jet's team has been discussing the source of these payments, with the airline insisting that the cost should be shared between the airline and the lenders. The banks – which have already taken a 95% haircut – do not want to take on any additional financial burden and want Jet to take full ownership of clearing employee dues.

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Jet Airways received its AOC earlier this year and has been in discussions with airports over slots. There were also reports of negotiations with aircraft and engine manufacturers ahead of the planned launch, but all that remains in limbo due to the tussle between Jet and its lenders. Hopefully, the new year will bring some positive development for all parties involved.

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Source: CNBC-TV18