Government Calls Emergency Meet As Jet Grounds More Flights
As Jet Airways, one of India’s largest airlines, hurtled towards bankruptcy, the government today called an emergency meeting with its management. The cash-strapped carrier is struggling to make payments to its creditors and has been forced to cancel hundreds of flights as it fights competition, a weak rupee and rising fuel costs. The maintenance engineers’ union of the airline today wrote to the aviation regulator DGCA that they are owed three months of salary and flight safety “is at risk”.
Civil Aviation Minister Suresh Prabhu tweeted this morning that he had asked for a compliance report from Jet and the aviation watchdog, the DGCA (Directorate General of Civil Aviation) immediately. Mr Prabhu also said he had asked for an emergency meeting on the issues such as grounding of aircraft, advance bookings, cancellations and refunds.
There are reports that the government has asked central banks to bail out Jet Airways for the moment to prevent the airline going bankrupt.
In an alarming letter to the DGCA, the Jet Airways aircraft maintenance engineers’ association has written that “it has been arduous to meet financial requirements, which has adversely affected the psychological condition of Aircraft Engineers and therefore the safety of public transport airplanes being flown by Jet Airways across India and the world is at risk.”
“It is a dynamic situation and there may be further attrition in coming weeks,” the aviation regulator said in a statement. Asserting that it is ensuring that all aircraft in the fleet are maintained in accordance with the approved maintenance programme, DGCA said it is “continuously monitoring overall situation and based on the same, will take appropriate steps by the end of the month, if needed.”
Jet has a debt of more than 1 billion US dollars. The airline has delayed payments to banks, suppliers, pilots and lessors – some of whom have forced the airline to ground as many as 41 planes, which is more than a third of its entire fleet. The airline said it would delay paying interest to its debenture holder, due March 19, because of financial constraints.
Centre Asks State-Run Banks To Save Jet Airways From Bankruptcy
The government has asked state-run banks to rescue privately held Jet Airways without pushing it into bankruptcy, as Prime Minister Narendra Modi seeks to avert thousands of job losses weeks before a general election, two people within the administration told Reuters.
The finance ministry has in the past year sought regular updates from the banks, led by State Bank of India (SBI), on Jet Airways’ financial health, the people said. In recent months, the banks have provided weekly updates about a revival plan and also sought government advice, the people added