Jet Airways’ former employees have been given one month to decide on a benefits package from its new owners. The deal includes a cash payment of ₹11,000 ($147) to ₹22,800 ($305), free flights, and some IT benefits. However, the package must be approved by at least 95% of employees to go into effect.
According to Business Standard, thousands of former Jet Airways employees have one month to approve the benefits package. Voting on the deal began on July 5th and will be completed on August 4th, 2021. However, those looking to take the package will have to garner the support of at least 95% of employees, a tall order.
As we’ve discussed before, the Kalrock-Jalan consortium is offering cash and ownership stakes to the airline’s former employees. Employees and workmen will receive a one-time cash payment of ₹11,000 ($147) and ₹22,800 ($305) respectively. Additionally, staffers can claim expenses for medical charges and schooling fees for children worth up to ₹5,100 ($68).
The biggest benefit comes through ownership of the airline and its subsidiary. The employee welfare fund will collectively own 0.5% of Jet Airways 2.0 and a 76% stake in the ground handling company Airjet. These shares could grow in value dramatically in the coming years, making them key to the benefits package.
Several more benefits are also being offered. Former employees will also receive a phone, iPad, or laptop from Jet Airways’ former IT supplies using a “lottery system.” Few other benefits include future flight vouchers worth ₹10,000 ($133.63), a mobile phone recharge, and more.
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The benefit package has been met with mixed reactions from former employees. Many have pointed out the lack of rehiring plans and relatively small one-time payments on offer from the new ownership. It is important to note that Jet Airways owed its employees over ₹1,265 crores ($169 million) when it went bankrupt. The carrier’s new owners are offering ₹52 crores ($6.9 million) to settle all of these claims, or 4.1% of the original dues.
The decision before former employees is a tough one. If the plan is not approved, the deal is off the table and employees receive nothing from the two year long process. However, the deal also falls far shorter than the hopes of many and excludes the most important term: promised rehiring of employees.
With voting already underway, it will be another month before we know what Jet’s employees have chosen. However, reaching 95% is a high threshold, and even a few holdouts could easily scuttle the entire package.
Jet Airways is in the midst of an ambitious turnaround plan, which will make it the first Indian airline to survive bankruptcy. Currently, the airline hopes to begin flying by the end of 2021, and is planning its formal revival. For now, expect to see much more action in the coming months as the airline hires new leadership, leases new aircraft, and plans its routes.
What do you think about the deal before Jet’s employees? Let us know in the comments!