Jet Airways defaults again in salary payment

-A Monitor Report 16 Oct, 2018 | 389 Views | - +
New Delhi: Jet Airways, india, second-largest airline, continued to face headwinds in raising capital to meet its payment obligations and is likely to default on the September salaries of pilots and engineers, a source privy to the development told CNBC-TV18.

In a meeting held recently between the airline's senior management and its domestic pilots' union, National Aviator's Guild (NAG), the airline has expressed difficulty in paying the first tranche of September salary on October 11, said people familiar with the development.

"The meeting was disappointing. The airline is facing issues in raising funds to meet our salaries. We would be receiving an official communication on the salary delay soon," said people familiar with the matter.

An email query to the airline on the matter remained unanswered till the time the article was published.

The Naresh Goyal-led airline, in which Etihad Airways holds 24 per cent stake, had earlier told its pilots and senior management that salaries for August, September and October will be paid in two instalments, one on 11 and the other on 26 of the succeeding month.

However, the airline had paid just 75 per cent payment of August salaries to its pilots, engineers and senior management by September 26 and had assured its pilots on Friday that the remaining 25 per cent would be paid by October 9.

According to sources close to the development, the balance amount of August salaries has been received, but it still remains uncertain whether salaries beyond October would be paid on time.

Witnessing financial turbulence since March quarter and troubled by soaring oil prices, depreciating rupee, weak fare scenario and heavy competition in domestic market, the airline has been struggling to meet payment obligations including salaries to over 16,000 employees.

The beleaguered carrier had received over Rs 250 crore from Jet Privilege, its customer loyalty programme, for advance ticket sale.

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