Jet Airways reduces some employees’ salaries by up to 50% and sends 60% of its workforce on unpaid leave
About 60% of Jet Airways’ staff, including top management, would be placed on leave without pay (LWP) for three months beginning on December 1. Additionally, the airline reduced some employees’ pay by up to 50%. The news came the same day that Jalan-Kalrock Consortium, the company that won the bid to revive the airline, issued a statement warning that it might need to make “tough decisions” soon.
According to CNBC-TV18, Sanjiv Kapoor, CEO of Jet Airways says “Some employees received temporary salary reductions, while some were placed on short-term Leave Without Pay.”
Even Sanjiv Kapoor, the CEO of Jet Airways, has reportedly agreed to take a significant pay cut, according to a Moneycontrol story. On Twitter, Kapoor, though, asserted, “No one is being fired.”
The Jalan Kalrock Consortium (JKC), according to a report by ET, has temporarily lowered the wages of some staff by up to 50% and placed others on unpaid leave.
Jet Airways issued the following statement: “While we await the transfer of the firm in accordance with the NCLT process, the longer-than-expected time being required for the same may result in some difficult but necessary near-term decisions to manage our cashflows to preserve the future while the airline is still not in our possession.”
The National Company Law Appellate Tribunal (NCLAT) has been informed by the new owner Jalan-Kalrock consortium that it is unable to pay extra funds to cover employee provident fund and gratuity debts totaling about Rs 250 crore.
According to sources, the Jalan-Kalrock consortium missed two payment deadlines. First, before the close of business on November 11, the consortium had to pay Rs 52 crore to workers and staff of the former airline. It was previously reported by CNBC-TV18 that this payment was not made. The payment of 185 crore rupees to various lenders is due by the second deadline. The Consortium had until November 16th to make this payment.
The consortium promised to inject Rs 900 crore for working capital and capital expenses. Only Rs 150 crore has been deposited by JKC as a performance guarantee thus far.
The asset management company Kalrock Capital Partners recently stated that its acquisition of Jet Airways was unaffected by investigations into Florian Fritsch, one of its investors. In Liechtenstein, Switzerland, and Austria, regulatory bodies are conducting investigations with the help of Fritsch. In connection with a money laundering investigation, investigators last week conducted raids on properties connected to Florian Fritsch in Austria, Liechtenstein, and Switzerland.
The challenges Jet Airways is experiencing during its comeback are postponing the start of its operations. Sanjiv Kapoor, the CEO of Jet Airways, had stated in April that the company aimed to fly its aircrafts in the quarter between July and September. As a preliminary step in obtaining the air operator certificate, Jet Airways carried out its test flight to and from the Hyderabad airport in May.
Jet Airways is presently resuming operations with its new promoters, the Jalan-Kalrock Consortium, after being grounded since April 17, 2019. According to Sanjiv Kapoor, CEO of the airline, “all the fantastic employees who have been working hard to get Jet back in the skies,” the test flight’s operation was a very emotional event.
Lenders chose Murari Lal Jalan, a businessman based in the UAE, and Kalrock Capital to restart the grounded airline in October 2020.