A day after Jet Airways chairman Naresh Goyal’s U-turn, civil aviation minister Praful Patel changed his tune too.
Talk of fuel arrears by the central government – Jet owes Rs859 crore and Kingfisher Rs110 crore to oil companies – did the trick
NEW DELHI: A day after Jet Airways chairman Naresh Goyal’s U-turn, civil aviation minister Praful Patel changed his tune too. Aware that he had landed himself in hot water for rushing to Goyal’s defence by virtually justifying the large-scale retrenchment of airline staff, Patel brushed off his earlier remarks on Friday and instead tried to claim credit for getting Jet to take back its sack order.
“I called (Naresh Goyal) on Thursday…and told him that in 24 hours we must find a resolution to this problem, otherwise we in the ministry would certainly not be very happy with the approach of Jet Airways,” Patel told the media.
Two days ago, he had defended the layoff decision as a consequence of the financial crisis in the aviation industry and blamed his ministerial colleagues for turning a deaf ear to pleas for a government bailout.
There is little sympathy in the government for either Goyal or Patel’s fervent pleas on behalf of private airlines. In fact, the ploy of drawing attention to the latter’s financial problems by resorting to the biggest layoff in aviation history seems to have boomeranged.
According to an informed source in the Congress, prime minister Manmohan Singh and finance minister P Chidambaram saw red over the attempt to arm-twist the government into giving private carriers financial concessions. Chidambaram is understood to have flatly refused any kind of bailout for private airlines. He apparently took the stand that it would spark off similar demands from other industries that are in difficulty, like the automobile industry, and the government cannot and should not get involved in corporate affairs.
The PM and Chidambaram were also worried that this kind of retrenchment could have a cascading effect and spark off layoffs in other sectors that are facing problems because of a domestic credit squeeze and the global meltdown. It would only deepen uncertainty and anxiety over the state of the economy and create political problems on election eve.
With the PM and FM taking such a strong stand, a message was sent to Goyal through interlocutors to withdraw the retrenchment order or face the music. The government has complaints pending with it about Jet’s finances.
It was also decided to field senior ministers on television to take on Goyal and Patel. But it was petroleum minister Murli Deora who really twisted the knife by raking up the money that private airliners owe to oil companies.
Jet is the largest defaulter, according to the ministry, with Rs859 crore in outstanding payments. Kingfisher owes Rs110 crore, the ministry said.
Aviation circles feel that now that the figures are out in the open, Jet (and Kingfisher) will have to pay up at least a part of what they owe, plunging them further in the red. So instead of resolving their financial problems, they may have ended up creating more headaches for themselves.
Patel too is facing the heat. A senior minister in the government felt that having identified himself so openly with corporate interests in the aviation sector, Patel has lost the moral authority to plead their case with the government. Certainly, the PM, the finance minister and the petroleum minister don’t seem to be in any mood to listen to him.
a_jerath@dnaindia.net
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