Published: Wed, March 20, 2019
Markets | By Otis Pena

Aviation Ministry to hold emergency meet on Jet Airways' grounding of planes

Aviation Ministry to hold emergency meet on Jet Airways' grounding of planes

Suresh Prabhu, Aviation Minister has directed his ministry's secretary to hold an emergency meeting on the debt-ridden Jet Airways massively cancelling flights after grounding of a large part of its fleet.

"Therefore the safety of public transport airplanes being flown by Jet Airways across India and the world is at risk", it said.

In what may spell further trouble for Jet Airways, the pilots of the cash strapped airline have threatened to stop flying from April 1 if the resolution plan is delayed and pending salaries are not cleared by the month end.

Its pilots union, National Aviator's Guild (NAG), had last week wrote to the government seeking its intervention in the recovery of dues on account of pending salaries.

But the deal got stuck after Mr Goyal refused to step down as Jet Airways chairman.

With a huge aircraft fleet and permissions to fly on many valuable global routes, Jet Airways is an attractive proposition for many investors in the market. With 41 aircraft, the airline is now operating only around 150 daily flights.

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In the letter, which was also marked to the Directorate General of Civil Aviation, the union warned the government and the regulator that the pilots of the airline are getting increasingly frustrated as salaries have not been paid on time and in full since September and at present, 87.5 percent of December and full salaries of January and February amount to outstanding dues.

Etihad bought its 24% stake in Jet Airways in 2013 for $379 million, or about ₹2,060 crore at the time.

Jet Airways chairman Naresh Goyal had on Monday said that the airline has "consciously" and "pro-actively" chose to curtail its schedule according to the number of aircraft it is now operating. People in SpiceJet on condition of anonymity had said that Jet has approached the airline.

The cancellation comes on the day, which was set by founder and Chairman Naresh Goyal to announce an update on the resolution plan.

But even Indian banks are wary of investing in the airline given its precarious situation.

India urged state-owned banks to swap debt for equity, and take stakes in Jet, news agency Reuters said. Ltd, the frequent flyer programme of Jet Airways.

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