Government reassures Jet Airways lenders, says slots given to others 'temporary'

NEW DELHI: In a bid to allay Jet Airways’ potential buyers’ fears that the grounded airlines slots will be protected, the aviation ministry on Tuesday stressed that the same are being allocated to others “purely on temporary basis for three months.” Jet’s unutilised slots are being given to other airlines so that they can add flights and help bring down runaway fares. However, this led to fears that minus slots, what is the potential value of Jet for any investor.
“The historic rights of Jet, as per provisions of the extant ministry of civil aviation guidelines for slot allocation, will be protected.These slots would be made available to Jet as and when they revive their operations as per guidelines,” the ministry said in a statement.
Lenders had approached the ministry to protect Jet slots to ensure its sale process does not come a cropper.
The ministry said it has formed a committee to give Jet’s slots temporarily to only those airlines “which bring in additional capacity (aircraft).”
Suspension of operations by Jet along with other factors like reduction in capacity in the Indian market has led to a sharp rise in airfares.
Since Jet does not really own anything, it could be attractive for buyers only for its slots at airports, flying rights to other countries and the experienced team of professionals like pilots, engineers and cabin crew.
The airline is now left with 1,527 pilots after seeing 410 co-pilots and captains leave in seven months. The airline’s pilots union, National Aviators’ Guild (NAG) has told members that plans for wet leasing some planes (where aircraft are taken by others along with operating crew) are being worked out. SpiceJet, Air India and AI Express are planning to take Jet’s repossessed and grounded Boeing 737s and B777s.
After a meeting with Jet management on Tuesday, NAG said in a communication to members that 410 pilots had resigned between last September and March 31, 2019 and that the airline now has on its rolls about 1,527 pilots.
Jet Airways temporarily suspended operations last Wednesday. Lenders led by State Bank of India are undertaking a process to find a new buyer for the now-grounded airline. The outcome of that will be known by mid-May. A failure to find a buyer may land the airline in bankruptcy.
More pilots, and other professionals of the airline, are now looking out for jobs. The number of pilots could fall further as many of them are awaiting appointment contracts with both other Indian and foreign carriers after having appeared in walk-in interviews.
Jet management has requested the government to expeditiously complete the sale process so that there is something left in the airline to buy. A delay will mean losing all professionals, and therefore losing all value. This point has repeatedly been emphasized by Jet CEO Vinay Dube.
In a mail to employees on Monday night, Dube informed them of the requests made to finance minister Arun Jaitley during a meeting last Saturday: “Emergency funding to help restart the airline (this would also help enhance the value of Jet Airways and benefit the banks’ bid process). Pay at least a month’s salary for our employees (in order to retain them) because an employee-less Jet Airways will not be worth investing in, for I am of the firm belief that Jet Airways’ true worth and value lies in YOU. And speeding up the sale process (to the extent legally permissible… We concluded the meeting by requesting him to intercede on our behalf with the consortium of banks.”
Meanwhile, a British startup entrepreneur Jason Unsworth — who describes himself as “founder & CEO of @atmosphereairuk & @atmosphereairth supporting Brexit by establishing a new premium airline group in 4 different countries” (including India), has expressed his interest in taking over a controlling share in Jet. He wrote to Jet CEO Vinay Dube. Unsworth’s startup Atmosphere Intercontinental Airlines hopes to start services from London Stansted later this year.