Hyderabad: Following the statements made by the public sector lender State Bank of India (SBI) on Wednesday that its aim is to see that Jet Airways (corporate debtor) should not be harmed in the ongoing financial crisis and it is in everybody’s interest to keep the airline flying, the All India Bank Employees Association (AIBEA), has objected banks’ proposal to take onus of shares and other responsibilities.
Lenders, led by the SBI, are trying to revive debt-laden Jet Airways by change in management as they feel collapse of the airline will not be good for consumers and competition. With Jet flying just about a third of its fleet, defaulting on interest payments and delaying salaries to pilot, State Bank of India chairman Rajnish Kumar along with Aviation secretary Pradip Singh Kharola and principal secretary to Prime Minister Nripendra Misra met Union Finance Minister Jaitley on Wednesday.
Reacting to the situation, C H Venkatachalam, general secretary, All India Bank Employees Association (AIBEA) told Telangana Today, “Running the airline is the business of Jet Airways and its management. Whatever loan they have taken from the banks should be repaid. The shares of Jet Airways should not be dumped on the shoulders of the banks. We totally disagree with such proposals and attempts of banks to purchase the shares of this ailing airline with a view to save the company at the cost of public money.”
He added, “All these private airlines were allowed and brought into operation only on the premises that private airlines would be much more efficient than public sector airlines. Because of this open encouragement, Indian Airlines was virtually weakened. There are attempts to sell the airline to some private buyers. But we now observe the ‘performance’ of private airlines is no different. Government should review its policy of weakening the public sector.”
Sticking to core
When Jet Airways was making profits, the profits went to the pocket of the owners. When the airline is in loss now, why public money and banks’ money should be spent to save such a company, he questions.
“We oppose these moves. Banks should only do banking business, not run airlines. Banks have given loans to Jet Airways and those loans need to be recovered. If Naresh Goyal can’t run the airline, can banks run the airline? Banks should sell the shares through auction and realise that money. Banks running the airline is not feasible. It will set a wrong precedence. If the loans are recovered by banks from Jet Airways, the amount can be further used for lending,” he added.
Venkatachalam said he will be writing to the Finance Minister on the matter that the government should not allow banks to buy shares and get involved in ownership.
Jet Airways has a debt of over Rs 8,200 crore and needs to make repayments of up to Rs 1,700 crore by the end of March. In case the airline collapses, 23,000 jobs would be at stake. Jet Airways is headed by Naresh Goyal, who currently holds 51 per cent stake. Abu Dhabi based Etihad Airways has 24 per cent. Lenders of Jet Airways have been working on a resolution plan for last five months.