Mumbai: Once a poster boy of Indian aviation, the fate of Jet Airways (India) Ltd and its more than 15,000 employees hangs in the balance a day after the airline suspended operations even as its lenders, the civil aviation regulator and the union government struggle to find ways to revive the company.

At stake is the uncertain future of employees, lessors and its vendors as well as the reputation of the Narendra Modi-led government, which has evidently tried to find a remedy to the crisis at what was till recently India’s third-largest domestic airline by market share.

But, that’s too little too late as groups of Jet Airways employees began a protest on Thursday against the airline’s grounding at New Delhi’s Jantar Mantar and outside the company’s headquarters in Mumbai. Some employees haven’t been paid up to three months of salaries and the rest haven’t received salary for March. The protesting group, standing in a loose human chain, blocked the entry to Jet Airways’ headquarters.

The development has come at a sensitive time when the ruling Bharatiya Janata Party-led National Democratic Alliance is seeking a second consecutive term at the centre, when job creation and economic growth are high on voters’ minds.

The matter has taken a political turn.

Kiran Pawaskar, Nationalist Congress Party (NCP) leader and president of All India Jet Airways Officers and Staff Association on Thursday criticized banks for not infusing the required funds and said the union would approach the labour commissioner.

“We don’t know why the banks led by State Bank of India (SBI) didn’t infuse ₹1,500 crore into the company after saying so," Pawaskar said. He has filed a police complaint against the management over salary dues.

Jet Airways flew its last flight—S2 3502, from Amritsar to Mumbai—Wednesday night, as it ran out of cash and lenders declined requests for more funds to keep the airline running.

“Jet Airways is grounded. Sad. It was once my default airline of choice. #Modi has so many spectacular achievements to his credit," Sanjay Jha, national spokesperson of the Congress, the main opposition party, said in a tweet.

As per protocol, industry regulator Directorate General of Civil Aviation (DGCA) has asked Jet Airways to prepare a “concrete and credible revival plan to restart the suspended operations". In 2012, DGCA had to cancel the licence of Vijay Mallya-led Kingfisher Airlines Ltd when the now-defunct airline failed to come up with a viable plan for its revival.

“DGCA would endeavour to do its best to help the company revive its operations within the set regulatory framework," it said in a statement.

Civil aviation secretary Pradeep Singh Kharola on Thursday did not say whether the government planned to take fresh measures to revive Jet Airways. Speaking to reporters in New Delhi, Kharola said airport slots vacant due to Jet Airways’ grounding would be temporarily assigned to other carriers for three months, which might be extended later. Preference would be given to carriers inducting new aircraft, he said, adding that “Jet will have a right on slots when it returns".

Kharola said there was a deficit of about 17 planes in India’s civil aviation market but expected airlines to add about 30 planes over the next three months. The carriers had assured the government about keeping fares at reasonable levels, he said, adding that state-run Air India was also in talks to add more planes, including for more international services.

“Passenger safety and convenience is the most important concern for the government," said Kharola, adding that the Jet Airways crisis had to be resolved between the carrier and the lenders.

All eyes are now on India’s largest lender, State Bank of India, and the consortium of banks it leads. For now, they believe the best way forward for the survival of Jet Airways is to get the binding bids from potential investors. In a statement, the consortium of lenders said they were “reasonably hopeful" that the bid process was likely to be successful in determining fair value of the enterprise in a transparent manner.

As for the bidders—Etihad Airways PJSC, National Investment and Infrastructure Fund (NIIF), TPG Capital and Indigo Partners—it is time for some hard bargain.

“The bidders are likely to ask lenders to take a significant haircut. The ball is in the court of lenders now," a person aware of the matter said, requesting anonymity.

While Etihad declined comment, queries to TPG Capital, NIIF and Indigo Partners didn’t yield a response till press time.

The National Aviator’s Guild (NAG), the pilots’ union of Jet Airways, said it would take legal action against the management. “This is a difficult situation for us. But we will be engaged with the management to help pilots and others recover their salary dues," said a member of NAG.

“Jet Airways has informed MoCA (ministry of civil aviation) that it is temporarily ceasing operations. The bank-led resolution process is still underway and expected to end by May 10. During this time, MoCA will support the resolution process within the existing legal and regulatory framework," the ministry said in a tweet. “DGCA and other regulators are monitoring the situation carefully to ensure that all existing rules regarding refunds, cancellations and alternative bookings are followed strictly."

Mint's Shayan Ghosh in Mumbai, Shreya Nandi and Gireesh Chandra Prasad in New Delhi contributed to this story.

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