India’s Jet Airways holds crisis meeting after lenders reject fund injection

Debt-laden Jet Airways’ operations is down to seven planes flying domestic routes. Above, a grounded pilot awaits news of the lenders’ meeting on Monday, April 14, 2019. (AFP)
Updated 16 April 2019

India’s Jet Airways holds crisis meeting after lenders reject fund injection

  • Thousands of passengers have been stranded in recent weeks after the airline canceled international flights because it cannot pay its bills
  • Lenders met for several hours on Monday but failed to agree on how to proceed

MUMBAI: The board of stricken Indian airline Jet Airways could suspend all operations Tuesday after lenders refused to release emergency funds to keep the debt-laden carrier flying, media reports said.
An emergency board meeting was called for Tuesday after the latest blow to the beleaguered company.
Thousands of passengers have been stranded in recent weeks after the airline, which has debts of more than $1 billion, canceled international flights because it cannot pay its bills.
Chief Executive Vinay Dube called the board meeting after lenders led by the State Bank of India failed on Monday to agree to give needed emergency cash.
“The management will seek guidance from the board on the next steps forward,” Dube said in an email to staff late Monday as he announced that the cancelation of international flights was being extended to Thursday.
Indian dailies said suspending all operations was one option open to the board though this could mean Jet would lose its operating license.
Business Standard quoted sources saying the airline had only enough fuel to keep its seven remaining jets running until Tuesday afternoon.
An official from the National Aviation Guild, the union for Jet pilots, said: “The airline is flying seven planes right now. The minimum number to keep its scheduled operations license.”
Jet has been in a tailspin for months. Its fleet has been cut from about 120 in December. It has defaulted on loans and most staff have not been paid for many months.
A consortium of lenders took control of Jet last month, pledging to give $218 million of “immediate funding support” as part of a debt resolution plan.
The lenders met for several hours on Monday but failed to agree on how to proceed.
Later the State Bank of India released a statement saying that the banks were trying to help Jet.
“Cooperation by and support from all the other stakeholders will be the key to the success of the process,” it added.
The SBI-led consortium is trying to find a buyer for Jet, which was until recently India’s second-biggest airline by market share.
A deadline passed Friday for prospective bidders to express an interest in acquiring a 75 percent stake in the carrier.
Etihad Airways, which owns a 24 percent stake, has reportedly submitted an expression of interest to buy a controlling stake.
The SBI was expected to announce a shortlist of prospective bidders later on Tuesday. They would then have until April 30 to submit formal bids.
A collapse of Jet would deal a blow to Prime Minister Narendra Modi’s pro-business reputation as he seeks a second term in ongoing national elections.


General Motors and workers union contract expires, increases risk of strike

Updated 48 min 27 sec ago

General Motors and workers union contract expires, increases risk of strike

  • Union officials told General Motors they would let the contract lapse just before midnight Saturday
  • A strike by 49,200 union workers would bring to a halt GM’s US production

DETROIT: The four-year contract between General Motors and the United Auto Workers has expired as negotiations on a new deal continue.
Union officials told GM they would let the contract lapse just before midnight Saturday, increasing the risk of a strike as early as Sunday night. Union members working Sunday were to report as scheduled.
But there was a wrinkle. About 850 UAW-represented janitors who work for Aramark, a separate company, went on strike Sunday after working under an extended contract since March of 2018, the union said.
The strike covered eight GM facilities in Ohio and Michigan. Although UAW workers at GM are supposed to work, it wasn’t clear early Sunday whether the rank-and-file would cross their own union’s picket lines. GM said in a statement that it has contingency plans for any disruptions from the Aramark strike.
UAW Vice President Terry Dittes said in a letter to members that, after months of bargaining, both the union and GM are far apart on issues such as wages, health care, temporary employees, job security and profit-sharing.
The union’s executive leaders and a larger group of plant-level officials will meet Sunday morning to decide the union’s next steps.
The letter to members and another one to GM were aimed at turning up the pressure on GM negotiators.
“While we are fighting for better wages, affordable quality health care, and job security, GM refuses to put hard working Americans ahead of their record profits,” Dittes, the union’s chief bargainer with GM, said in a statement Saturday night.
Kristin Dziczek, vice president of the Center for Automotive Research, an industry think tank, said the union could strike at GM after the contract expires.
“If they’re not extending the agreement, then that would leave them open to strike,” she said.
But GM, in a statement Saturday night, still held out hope for an agreement, saying it continues to work on solutions.
“We are prepared to negotiate around the clock because there are thousands of GM families and their communities — and many thousands more at our dealerships and suppliers — counting on us for their livelihood. Our goal remains on building a strong future for our employees and our business,” the GM statement said.
A strike by 49,200 union workers would bring to a halt GM’s US production, and would likely stop the company from making vehicles in Canada and Mexico as well. That would mean fewer vehicles for consumers to choose from on dealer lots, and it would make it impossible to build specially ordered cars and trucks.
The union’s executive board was to meet early Sunday to talk about the union’s next steps, followed by a meeting in Detroit of plant-level union leaders from all over the country. An announcement was scheduled for after the meetings end.
If there is a strike, it would be the union’s first since a two-day work stoppage at GM in 2007.
The move by the union also comes as it faces an internal struggle over a federal corruption investigation that has touched its president, Gary Jones. Some union members are calling for Jones to step down while the investigation continues. But Friday night, union leaders did not remove Jones.
Union officials surely will face questions about the expanding investigation that snared a top official on Thursday. Vance Pearson, head of a regional office based near St. Louis, was charged with corruption in an alleged scheme to embezzle union money and spend cash on premium booze, golf clubs, cigars and swanky stays in California. It’s the same region that Jones led before taking the union’s top office last year. Jones has not been charged.
On Friday, union leaders extended contracts with Ford and Fiat Chrysler indefinitely, but the pact with General Motors was still set to expire Saturday night.
The union has picked GM, which is more profitable than Ford and Fiat Chrysler, as the target company, meaning it’s the focus of bargaining and would be the first company to face a walkout. Picket line schedules already have been posted near the entrance to one local UAW office in Detroit.
Talks between the union and GM were tense from the start, largely because GM plans to close four US factories. The union has promised to fight the closures.