Lenders look to revive Jet by changing management

New Delhi: Lenders, led by the SBI, are trying to revive debt-laden Jet Airways by change in management as they feel collapse of the airline will not be good for consumers and competition, a source said after the SBI chief met Finance Minister Arun Jaitley on Wednesday.

With Jet flying just about a third of its fleet, defaulting on interest payments and delaying salaries to pilot, State Bank of India chairman Rajnish Kumar along with Aviation Secretary Pradip Singh Kharola and Principal Secretary to Prime Minister Nripendra Misra met Jaitley Wednesday afternoon.

Kumar said the meeting was to apprise the government, which is an important stakeholder, about the happenings in what was once India's second-biggest airline, and not to discuss a bailout package.

He, however, emphatically stated that it was in the interest of the lenders and consumers to keep Jet Airways flying and dragging the debt-ridden firm under bankruptcy proceedings is the last option.

Jet Airways has a debt of over Rs 8,200 crore and needs to make repayments of up to Rs 1,700 crore by the end of March. In case the airline collapses, 23,000 jobs would be at stake. Though Kumar refused to share details of the lenders' resolution plan, the source said that the lenders have proposed to change the management of the beleaguered air carrier as they feel it is not possible to run the company with present management.

Jet Airways is headed by Naresh Goyal, who currently holds 51 per cent stake. Abu Dhabi based Etihad Airways has 24 per cent. There were media reports that Etihad has approached the SBI to purchase its 24 per cent stake in the airline.

On getting a new player in Jet Airways, Kumar said, "No possibility is ruled out". "The dialogue with Etihad is on. It is not that they have conclusively decided that they will go out. But there are certain conditions which they want to be fulfilled and it is nothing but that the airline should be professionally managed and without any interference," he said.

Lenders of Jet Airways have been working on a resolution plan for last five months and it is almost ready, Kumar said, adding "We will make every effort to keep Jet Airways flying and in no manner, it is a bailout for any individual or any promoter whatsoever".

The SBI chief said that resolution of a service industry, like airline, is nearly impossible under Insolvency and Bankruptcy Code (IBC) and is the last option. "IBC means that we are grounding the airline. We will keep trying till such time we believe that all hope is lost. But as on date, I can say that not all hope is lost. We have not reached that decision point where we say enough is enough and nothing can be done," Kumar said.

Chairman of the country's largest bank said that the government is the most important stakeholder and it is the duty of the lenders to keep the government informed. "It is in the lender's Interest, the country's interest, the aviation sector's interest that Jet Airways continues to fly," Kumar added.

The pilots union of Jet Airways had on Tuesday threatened to stop flying from April 1 if their salaries are not paid by March 31. The Directorate General of Civil Aviation (DGCA) said only 41 aircraft of the Jet Airways were currently available for operation and there may be "further attrition" of flights "in coming weeks". 41 aircraft are just one-third of Jet's fleet of 119 planes.