jet airways: Jet Airways employees to be absorbed by other airlines: Jayant Sinha


Banks have to make decisions in their commercial interest and use their commercial judgment. We have to build a

globally competitive economy where the most competitive and efficient firms thrive and Jayant SinhaMinister of State for Civil Aviation, in an interview with ETNOW.

Edited excerpts:

Now that Jet Airways is grounded, what will happen to the employees?

We want to make sure that the very capable and talented Jet Airways employees are absorbed into the aviation ecosystem as quickly as possible and that they have a very good and smooth landing. We are very focused on securing good job prospects for them.

The good news in all of this is the fact that the industry is booming, there is a huge long-term demand for aviation services and I am sure that all the talented and capable Jet Airways employees will find a very good home whether at Jet . Airways or other companies. Of course, this is how markets work. What happens is that people move from less competitive to more competitive companies and in India we have to build a globally competitive economy where the most competitive and efficient companies thrive and succeed.

But some of these employees have not been paid in the last four months. Why is the government holding a hands-off approach in this matter?

It is very clear that governments intervene in the economy only when there are systemic risks. This is a widely accepted consensus around the world and you have to distinguish between IL & FS that would lead to contagion and a systemic set of issues and Jet Airways that operated smoothly within the existing legal and regulatory framework and where they exist without systemic risks.

For us, as we deal with the aviation system, the important thing is to ensure that this market disruption goes smoothly and that all assets and people are absorbed efficiently, without much friction within the existing legal and regulatory framework. That's what we did, the ability came quickly to absorb the capacity of Jet Airways that left the system, the tariffs remained relatively stable and all the inconveniences, refunds and cancellations of the passenger we are processing to ensure that passengers are not bothered by way.

So, markets work and we have to let markets work. When governments operate, they have to establish a legal and regulatory framework and, within that, the various actors have to behave.

But the gap is quite obvious. About 20,000 jobs have been lost compared to a SpiceJet or a few other airlines that will be looking for airplanes, cabin crew or other personnel. Is there a huge gap there?

You are taking a short-term view. There is a transition process that happens and during the transition process, there are challenges that need to be made, but whatever the debts of people, they will have to be met in some way or another. But take some time and you'll see that everyone will be very well absorbed. I will take you back to Kingfisher, after the Kingfisher shutdown everyone has been absorbed in several other airlines and they continue to have great careers. Just take a moment and you will find that the absorption process will happen quite smoothly.

There are people who died too, there are people who could not pay their EMIs?

I feel terrible, I feel very sad and terrible about it and, of course, the goal is to ensure that everyone is protected and that everyone is safe, but we live in an open market economy and it is important for each individual to think about the fact that they have to be able to have proper protection buffers and so on. Yes, companies enter and leave the business and this is a fact of an open market economy. This is how open economies work. Some companies succeed, some companies fail. We all have to recognize this.

The reason I'm asking you this question is because the banks first said they are pumping at Rs 1500 crore, but that money never came. Why have banks developed cold feet? What really changed for them?

Banks have to make decisions in their commercial interest and use their commercial judgment. When I was in the finance ministry, we had a major conclave in Pune in 2015, and we made it very clear, and the illustrious Finance Minister and the distinguished Prime Minister made it clear that in our government, banks would be free to do what they think is right in their business interest. They are accountable to their stakeholders, their depositors and must do what they think is the right thing to do commercially.

That is exactly what they are doing with regard to Jet Airways. And we have to let them do that because that's how we create responsibility in the system, that's how we reduce the price of risk in the system.

The government needs to establish a legal and regulatory framework, and then several actors must behave accordingly. Otherwise, if there is arbitrary intervention by the authorities, you raise the price of the risk, it will create a very opaque and arbitrary decision making, and then it will be very difficult for people to understand how they need to behave.

You said that there will be people who will be absorbed in other airlines and there is no need to worry, things will get better from now on. Precedence says that once an airline is closed, it never comes back.

This is a question you should ask the banks. Those who are competing for Jet Airways should take into account the value of Jet Airways. Now they have to bid on it and so on. Let the resolution process led by the banks unfold. Our job as regulators is to ensure that markets work well, that there is no arbitrariness in the rules-driven process and in the rule-driven environment that we establish. That is what we are engaged in.


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