New investor soon: Jet to pilots
CEO Vinay Dubey assures pilots union that salary dues will be cleared in the next 45-60 days
JET AIRWAYS NEEDS TO URGENTLY RAISE CASH TO STAY AFLOAT, AS COSTLY FUEL AND A WEAK RUPEE HAVE HURT ITS FINANCIAL HEALTH
MUMBAI: Jet Airways (India) Ltd would bring on board a new investor in two-three months to help fund the cash-strapped airline, the company told its pilots at a meeting last week.
Top officials of Jet Airways, led by chief executive officer (CEO) Vinay Dube, offered the assurance at a November 26 meeting with the pilots union, National Aviator’s Guild, said two people aware of the matter, requesting anonymity.
The meeting was held to assuage pilots about various issues including salary delays.
“Vinay Dube, who represented the management at the meeting, told the pilots that the airline will get an investor on board soon, likely within the next two-three months,” said the first of the two people cited above.
Dube did not name the investor.
“Dube also assured that salary delays are temporary and should be addressed in the next 45-60 days, and probably before the new investor comes on board,” said the person.
The second person said Dube assured pilots that Jet was working to regularize their salaries.
“Dube emphasized that some investors are ready to invest and that the airline is expected to receive cash infusion soon,” the person said.
Jet Airways, which had a 13.3% share of the domestic aviation market in October, needs to urgently raise cash to stay afloat, as costly fuel and a weak rupee have hurt its financial health.
The airline has delayed payment of salaries to a section of its staff, including pilots and senior employees.
“We have sought a meeting with the management again, which is likely to happen before December 10 in Mumbai,” said the first person.
A spokesperson for Jet Airways did not respond to an emailed query.
Jet had a net debt of ₹8,052 crore as of end-september. In August, the airline’s board approved a turnaround plan, which includes cutting costs by over ₹2,000 crore over two years, leveraging its stake in loyalty programme Jetprivilege, improving pricing and capital infusion.
Mint reported in October that Jet had hired Goldman Sachs Group and Boston Consulting Group as advisers to achieve these goals.
“Restructuring of Jet Airways must address the longstanding neglect of its domestic operations and find permanent fixes; a change of ownership may be necessary to secure Jet’s long-term viability,” aviation consultancy firm CAPA India said in its mid-year aviation outlook for the year to March 31.