Jet Airways’ former employees have rejected the benefits package proposed by the carrier’s new owners. Only 35.1% supported the deal, while a huge 61.6% abstained from voting, nowhere near the 95% threshold set to the Kalrock-Jalan consortium. In response, employees have filed cases in bankruptcy court to receive a better package.
According to Business Standard, the results of the employee settlement package vote are in, and it’s not looking good for the new owners. Of the 8,973 employees eligible to vote for the package, only 35.1% voted in favor, 3.3% voted against, and a huge 61.6% chose not to vote at all. Since the resolution plan requires 95% support for any deal to pass, the employees have lost the chance to receive any funding from the new owners.
There was notable dissatisfaction with the Kalrock-Jalan proposal. The biggest concern was the absence of any potential rehiring plans for the new airline. Instead, the carrier proposed a small one-time payoff and some miscellaneous benefits to every employee. Additionally, the new owners also offered a 0.5% stake in the carrier. However, this was not enough to sway the unhappy employees.
Now, employees will be eligible for no benefits from the carrier’s resurrection, and the 0.5% airline stake will go to financial creditors. However, the fight is not over just yet, and former employees are moving forward with a legal challenge.
As the deal fails, the Jet Airways Cabin Crew Association and one more union have moved the National Company Law Tribunal (NLCT) to protest the current resolution plan. In a statement, one lawyer bringing the case on behalf of the union said,
“We are not against the successful revival of Jet Airways but aggrieved by the approved resolution plan only to the extent of the provisions of continuity of service of employees and quantum of their pending legal dues.”
The tensions have been exacerbated by Jet’s decision to put out applications for new pilots online instead of tapping into its pool of thousands of existing ones. While this will result in lower salaries and costs to the airline, it hasn’t gone down well with those dedicated to the former carrier.
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Indian aviation is a fast-moving industry, with new players cropping up every day. As another heavily funded low-cost airline joins the scene, Jet Airways is at risk of seeing its full-service market share shrink even further. Moreover, competing with Air India and Vistara for a tiny sliver of the market could prove unsustainable all over again.
For now, Jet is likely to restart operations at the end of 2021 or early next year. This will give it enough time to hire management, staffers, and lease new planes. If the carrier’s name recognition is enough to help it in this crowded market, remains to be seen.
What do you think about the failure of the benefits package? Let us know in the comments!