Jet Airways founder Naresh Goyal quits as chairman

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New Delhi, 25 Mar: Beleaguered Jet Airways got Rs 1,500 crore interim funding on Monday after a week-long uncertainty over its management ended with Chairman Naresh Goyal and his wife Anita quitting the Board of India’s second-biggest airline, which they founded 25 years ago.


The airline’s board also approved a resolution plan by lenders including the State Bank of India, who are expected to come up with the name of a working chairman. Names of former SBI chairmen Arundhati Bhattacharya and Janaki Ballabh are doing the rounds for the top post. A formal announcement to this regard is awaited.


CEO Vinay Dube will continue in his position.


Sources said that Goyal’s share in the airline will also get reduced to a little over 25%. Goyal currently holds a 51% stake in Jet Airways, while Abu Dhabi-based Etihad has 24%. Etihad’s share too will come down by half, according to sources. Soon after the exit of Goyal’s, Jet Airways shares jumped 15%.


The move to remove Goyal was formalised after SBI Chairman Rajnish Kumar last week met Finance Minister Arun Jaitley and PMO officials to get approved a resolution plan for the debt-laden airways. Kumar had said that it was in the interest of the nation and the public that Jet Airways was kept afloat.


He said every effort would be made to revive the airline and the lenders would ensure that it was not put under the Insolvency and Bankruptcy Code (IBC). Jet Airways has a debt of around Rs 8,000 crore.


Having already burnt its fingers with Kingfisher, this would be the second such attempt by the public sector lenders to bail out a private airliner at the cost of taxpayers money.


“It is in the larger interest of the country, public and the lenders that Jet Airways continues to fly. We have not lost all hopes and all efforts will be on to keep it flying,” Kumar had said after meeting PMO officials.


The bankers were of the view that the current management of Jet Airways did not have the ability to pull through the crisis.


Jet Airways has only 38 operational plans left in its fleet of 119 and the pilots, who have not been paid since December, have threatened to go on strike from April 1 if the resolution plan was delayed.


According to estimates, Jet Airways employs more than 22,000 people, whose jobs would have been at a stake if the crisis were not resolved.


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