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Jet Airways founder and chairman, Naresh Goyal, has stepped down from his role with the carrier as it battles insolvency.
The move is part of a deal that will see the Indian airline taken over by a consortium of lenders, led by the state bank of India.
Naresh’s wife, Anita Goyal, and Kevin Knight, a nominee director from stakeholder Etihad Airways, will also leave their positions on the board.
Jet Airways has been in deepening financial difficulty, with all but 41 of its 123 aircraft grounded and two-thirds of its flights cancelled last week.
Lenders will immediately provide INR1,500 crore ($200 million) in order to keep the airline afloat.
The airline will use the cash to part clear pending debts towards lessors, vendors, creditors and employees in a phased manner, Jet said in a statement.
Many staff have not been paid in months, while lessors had begun to refuse to work with the carrier.
The move will also see Jet Airways re-deploy several of its grounded aircraft back into its network, helping renew many of the routes it had temporarily suspended.
Goyal said: “For the sake of my family of 22,000 employees and their respective families I have today taken the step of stepping down from the board of Jet Airways.
“I became the chairman on April 1st, 1992, and my family is behind me and with me in this decision and I hope you will support my decision too.
“I will miss you one and all.”
An interim management committee has been constituted to oversee the operation of the airline under the overall supervision of the board of directors and with the support of McKinsey & Co.
As part of the resolution plan, lenders will also begin the sale of new shares to investors, a process which is expected to be completed in the June quarter.
Etihad, which owns a 24 per cent stake in Jet Airways, will retain one nominee on the board and Goyal two.
With Jet Airways set to enter insolvency within days, Etihad chief executive Tony Douglas made clear that the Abu Dhabi-based carrier would provide no more money without Goyal’s removal as chairman.