Cloud of uncertainty hovers over the 600 employees of Jet Airways’ JetLite unit

JetLite’s permit to operate commercial flights, Aircraft Operator’s Permit, is set to expire next month. 

JetLite’s permit to operate commercial flights, Aircraft Operator’s Permit, is set to expire next month. 
| Photo Credit: PICHUMANI K

The almost 600 staff of JetLite, the wholly owned unit of Jet Airways, still await clarity on how the dues owed to them will be paid.

The National Company Law Appellate Tribunal (NCLAT) order last month directing Jet’s new promoters, the Jalan Kalrock consortium, to pay provident fund and gratuity to the parent airline’s staff had lent a glimmer of hope at JetLite.

“JetLite India Limited is not part of the resolution plan submitted by the Jalan-Kalrock Consortium (JKC) as approved by the NCLT,” a spokersperson of JKC said in reply to a query from  The Hindu. “Accordingly, we cannot comment on the present status of JetLite, employees or the assets owned by it.”

Jet had acquired Sahara Airlines in 2007as a wholly owned arm and christened it as JetLite. Sahara Airlines’ employees were then considered its “continued employees.”

The 2021 NCLT order, approving the JKC’s resolution plan paving the way for revival of Jet Airways, however said the JKC had proposed to offer 100% equity held by Jet Airways in JetLite to the financial creditors, and if that was not acceptable, the JKC would have to liquidate the airline as soon as possible.

Call on liquidation

Industry sources, closely involved with Jet Airways’ insolvency process, said the creditors refused the JKC proposal, which implied that once a board for Jet Airways was constituted, comprising JKC and creditors, a call would be taken on JetLite’s future.

They explained that under the IBC law, a subsidiary is considered a ‘separate juristic person’ and therefore, insolvency proceedings against a principal company doesn’t automatically mean insolvency of its subsidiaries.

Though a former Board member of JetLite pointed out a contradiction and said that JetLite does find a mention in the Resolution Plan, and so does an associate company of Jet Airways like Jet Privilege Private Limited. “Has JetLite been left out because it is seen as a liability. Jet Airways through its Resolution Professional or Monitoring Committee is accountable for JetLite because the entity finds mention in the Resolution Plan.”

But with JKC and lenders reaching another stalemate after the former moved the NCLAT this month pleading that while it would pay the employees from its cash balance, the balance amount would have to come from the lenders, the fate of JetLite and its staff hangs in balance.

Meanwhile, JetLite’s permit to operate commercial flights is set to expire. “The resolution professional can’t wash his hands off this responsibility,” said Hariharan Narayan, a Jet Airways Officers and Staff Association member.

The resolution professional, Mr. Ashish Chhawchharia, declined to comment on the issue.

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