Employees’ Consortium Proposes To Takeover Jet Airways
Two employee unions have said they can bring in up to Rs 7,000 crore with interest from outside investors.
As uncertainty continues over the fate of the grounded Jet Airways (India) Ltd., an employees’ consortium has proposed to take over the airline with at least Rs 3,000 crore expected from outside investors for the bid, according to two staff unions.
This is the first time that employees have come together with a proposal to run the over 25-year-old Jet Airways, which temporarily suspended operations on April 17.
Two associations representing pilots and engineers—Society for Welfare of Indian Pilots and Jet Aircraft Maintenance Engineers Welfare Association—have written to State Bank of India Chairman Rajnish Kumar proposing that they would take over the airline and can bring in up to Rs 7,000 crore.
The unions’ letter to the SBI chief asked the lead lender to consider “employee consortium” as an intending bidder for the carrier. While Society for Welfare of Indian Pilots has around 800 members, there are about 500 employees with Jet Aircraft Maintenance Engineers Welfare Association.
“The contribution from employees would be realised from their future earnings and increased productivity... As per our initial estimate, the contribution of employees group over a hypothetical 5-year Employee Stock Ownership Programme is likely to be upward of Rs 4,000 crore,” the letter, dated April 29 said. “In addition, we are also confident of securing an investment commitment of up to Rs 3,000 crore from outside investors.”
The letter has been signed by four people—SWIP General Secretary Ashwani Tyagi, JAMEVA President Ashish Kumar Mohanty, Jet Airways Manager (Human Resources) BB Singh and Jet Lite Senior Vice President (Operations) and Accountable Manager PP Singh.
The deadline for submitting initial bids have already ended and the list of shortlisted entities is expected to be finalised on May 10. SBI Capital Markets, on behalf of the lenders' consortium led by the SBI, is managing the bidding process.
“We confirm that a proposal for employee takeover of Jet Airways has been submitted by us... We are optimistic that the banks and Government of India will give our plan a serious consideration,” the two unions said in a joint statement.
Tyagi said the letter has also been signed by two officials of the airline.
Cash-starved Jet Airways stopped operations on April 17 after lenders decided not to extend emergency funds. Since then, employees have held gatherings in various cities and have also met various ministers with pleas to save the airline.