New Delhi: The government is likely to turn to public sector banks to rescue Jet Airways in an apparent bid to avert thousands of job losses weeks before the general election.
Sources said the government wants National Investment and Infrastructure Fund (NIIF), where it owns 49 per cent stake and whose mandate is to invest in stalled and new infrastructure projects, to buy a stake in Jet to save the cash-strapped airline.
Saddled with more than Rs 8,000 crore of debt, Jet is struggling even to pay salaries as it defaulted on payments to banks and aircraft lessors some of whom have reportedly begun to terminate lease deals.
The aviation sector employs close to 10 lakh people.
The Finance Ministry has been in touch with banks led by State Bank of India (SBI) on Jet's financial health . If banks agree to government proposals, then state-run banks including SBI and Punjab National Bank (PNB) as well as NIIF would together may own at least a third of the airline until they find a new buyer.
Currently, Abu Dhabi's Etihad Airways is Jet's largest shareholder with a 24 per cent stake.