Increasing debt and fierce competition in the private airline industry forced Jet Airways to halt operations in April at a cost of thousands of job and resulting in a massive surge of airfares across the industry. Currently, the airlines and its lenders are looking for new investors and the jobless employees have been calling for government's intervention. However, the government has so far not done anything provide relief to thousands of Jet employees.
Puri took over the aviation ministry at a time of distress in the industry. Last year, the government unsuccessfully sought a buyer for money-losing state-owned carrier Air India Ltd. "We have made mistakes in civil aviation in the past which we need to correct,” Puri said.
Earlier this week, two operational creditors--Shaman Wheels and Gaggar Enterprises moved the NCLT seeking bankruptcy proceedings against the airline. The tribunal issued notices to Jet Airways and banks which own the airline now and posted the matter for further hearing on June 13 when it will decide on admitting or rejecting the bankruptcy pleas.
Jet Airways owes more than Rs 8,000 crore to a consortium of banks led by the State Bank of India, which now run the airline, while it has a much larger debt pile by way of accumulated losses to the tune of Rs 13,000 crore and vendor dues of over Rs 10,000 crore and salary dues of over Rs 3,000 crore. The banks have appointed SBI Capital Markets as the investment banker to find an investor to scout an investor for the company.
Though it had received initial bids from Ethihad Airways and two private equity players TPG Capital and Indigo Partners, and the sovereign wealth fund NIIF, none of them chose to submit the final bids. Currently the bankers are trying to stave off bankruptcy even as media reports said Etihad Airways, which already owns 24 percent in the airline, has teamed up with the Hindujas to buy the airline.
(With additional inputs from PTI)