Jet Airways defaults on salaries yet again, seeks 13 more days

The crisis-hit Jet Airways has yet again defaulted on the salaries of its employees. The cash-strapped airline has told its employees that some portion of their August salaries will be disbursed on October 9. The latest communication comes after earlier this month the company said it will release the employee salaries in two different instalments -- one on September 11 and the remaining on September 26. The company has paid the first half's salaries to its employees but failed to disburse the remaining part in full. A Jet Airways spokesperson said the airline has released 50 per cent of the second instalment to the employees concerned and would release the remaining part on October 9. UAE's national carrier Etihad holds 24 per cent stake in the debt-ridden Jet Airways.

"While we have remitted the first instalment, please note that we shall be remitted 50 per cent of the second instalment today and defer the remaining sum to a later date. The company is committed to honouring its obligations and shall make every effort to release the remainder by October 9, 2018," Jet Airways Chief People Officer Rahul Taneja said in a communication addressed to pilots, aircraft maintenance engineers and senior management on Wednesday, reported PTI. Taneja has also expressed "regret" over the change of plan and inconvenience caused to the employees.

The Jet Airways shares also took 5 per cent fall in the early morning trade on Thursday after the airline sought 13 more days to pay the remaining salaries. The share opened at Rs 182.50 only to plunge to Rs 178.90 at 12.45pm. The share closed at Rs 192.05 on Wednesday. Ever since the airline asked its employees to bear a salary cut, only to backtrack it later, the Jet Airways stock has taken quite a beating.

Pilots working with Naresh Goyal-led carrier had earlier threatened its management of "non-cooperation" over further delays in the disbursement of their salaries.

The airline is facing a deep financial crisis due to high fuel cost and continuously depreciating value of rupee. A fierce competition from local players has also added to its woes, leading to Rs 1,036 crore and Rs 1,300 crore losses in the quarters ending March and June, respectively. Its total liabilities from banks have grown to over Rs 8,600 crore.

The airline is on a damage control mode, with a turnaround plan in place, but alleged falsification of accounts and suspicious transactions coupled with its inability to pay salaries in time is causing a hindrance. Last week, the Income Tax department inspected the airline's books and conducted the operations at four of its premises.

Banks are getting cagey with handing out more loans to the company; State Bank of India has already put it in stressed accounts watchlist. The public lender reportedly wants details on the airline's future plans and cash flow position as well as sufficient collateral before opening the credit tap.

Edited by Manoj Sharma