HYDERABAD: Over 1,000 employees of grounded Jet Airways India Ltd have volunteered to forego salaries, take remuneration cuts besides borrowing money to buy shares and own equity in the airline.
On Tuesday, the Sankaran P Raghunathan-led team representing minority shareholders and frequent flyers, submitted a fresh save-the-airline proposal — ROJA or Revival of Jet Airways — to banks, SBI Capital, Etihad Airways and NIIF.
“Employees are airlines’ biggest asset, but sadly no one’s talking to them. Our survey revealed that employees are willing to take salary cuts and even borrow to buy shares to help the company get back on its feet,” Rajesh Soundararajan, one of the nine professionals who devised ROJA told TMS. Incidentally, Jet’s CEO Vinay Dube, who supported the proposal, quit on Tuesday.
As on March 2018, Jet had over 20,000 employees and incurred over Rs 3,000 crore towards annual employee expenses. While airlines like SpiceJet and TrueJet absorbed some staff, several thousands are stuck jobless.
Wracked with grief, but nowhere to go, employees are going out of their way to revive the airline, with over 50 per cent willing to take loans of up to six-month salary to buy Jet’s stock, while others were willing to take up to 18 months’ salary.
The survey had over 1,350 participants. Interestingly, 26 per cent of the respondents are Jet’s shareholders.
Soundararajan reasoned that ROJA was the only viable plan on the table, as it prevents banks from taking a haircut as opposed to potential investors who may insist on at least 80 per cent of the airline’s existing debt to be written-off.
Banking on Jet’s enviable 80 lakh frequent flyer base, the plan offers a unique proposal to pre-sell tickets for Rs 10,000 each valid for two years. This could help raise Rs 8,000 crore and together with an issue of preferential shares (aggregating Rs 12,000 crore), ROJA proposes to raise Rs 20,000 crore, which then could be used for working capital and repayment to creditors.
“For ROJA to work, we need a bridge fund of Rs 3,500 crore and we have reached out to Etithad, NIIF and banks,” he explained, adding, “It caters to the need of foreign investors putting in intermediate loan while maintaining the ownership with Indian management. The idea is to transfer the ownership to employees, to ensure that the airline isn’t grounded forever.”