JET AIRWAYS: Stakeholder’s Dilemma

Picture Credits: Agnibh Kumar |

From aircraft engineers writing to the DGCA about ‘Flight Safety Risk’ to the lack of funds leading to employees to go on a strike and culminating in the suspension of flights, Jet Airways has been in the midst of raging problems.

In mid-March, aircraft engineers wrote to the DGCA alleging a “Flight Safety Risk’. Only a while later, a victim of competition, Jet Airways was struggling with financial difficulties leading to non-payment of salaries to its; as a result of which, the pilots sought to go on a strike from the 1 st of April. Dues from the month of December weren’t paid due to a lack of funds stemming from the resistance of investors to invest in the company and banks to grant loans. The article focuses on 3 stakeholders affected by this.

16,500 jobs are up in the air. Salaries since December hadn’t been paid and the suspension of operations had an immediate effect. The employees were given no notice period to prepare for this suspension; so as to make adequate arrangements for it. They weren’t even given salaries since December adding on to a lack of source of income.

Jet Airways is likely to become the first Indian airline to collapse since the Kingfisher Airlines ceased operations in 2012. It cancelled all domestic and international flights with immediate effect due to the lack of funds. The airline had pleaded with banks to release Rs.400 crore in interim funds but the banks declined. Since no emergency funding will be received the airline will be unable to pay for fuel and other critical services to continue operations. Currently, Jet is trying to secure a new investor as soon as possible. The lenders, after calling for Expression of Interest (EoI), short-listed four potential investors: Gulf airline Etihad Airways, state-owned National Infrastructure and Investment Fund and private equity firms Indigo Partners and TPG. The bid process will conclude on 10th May.

-Ritika Acharya and Shruti Dhonde

1st year, Maharashtra National Law University Mumbai

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