Title : INDIA: From 124 Planes In December, Jet Now Operating 6 ATR Turboprop Planes And One Boeing 737.
link : INDIA: From 124 Planes In December, Jet Now Operating 6 ATR Turboprop Planes And One Boeing 737.
INDIA: From 124 Planes In December, Jet Now Operating 6 ATR Turboprop Planes And One Boeing 737.
Jetair is the general sales agency (GSA) that birthed Jet Airways.
On Friday, the bid from the Future Trend-Jetair consortium came in at 6:08 pm, eight minutes after the deadline for submitting expressions of interest (EoIs).
Jet’s lenders may weigh this factor, among others, while selecting investors for the airline that is desperately seeking fresh capital.
Not much is known about Future Trend, it is believed to have pockets deep enough to propose an interest in bidding for Jet.
Sources said Adi Partners, a London-based firm, is also associated with the consortium of Jetair and Future Trend.
According to the conditions in the bidding document, an investor needs to have a net worth of Rs 1,000 crore and allotted funds of Rs 1,000 crore more to invest in Jet.
Technically, there is nothing that stops Goyal and his associates from bidding. The forensic report has so far not gone against him.
Also, Jet Airways is not a case under the Insolvency and Bankruptcy Code that bars existing promoters from re-entering. But after being almost nudged out from the board and management, it’ a call the bankers would have to take, said a banker.
Founded in 1974, Jetair was Goyal’s powerful GSA that represented as many as 17 global airlines before it spawned Jet Airways in the 1990s.
Its current interests, according to its website, include Jetair Tours and Jetfleet — a car rental service. Jetfleet, on its website, describes Jetair as an aviation services group that includes Jet Airways as an affiliate.
According to another banker, one of the options to salvage Jet Airways would be to bring in multiple, unconnected investors.
Investments by Etihad Airways, National Investment and Infrastructure Fund, and a private equity fund like TPG Capital or Indigo Partners with each holding 24% or less in the expanded equity pool could be a way to avoid an open offer.
Etihad, for instance, does not want to raise its stake beyond 24%.
Etihad has said it does not want its shareholding in Jet Airways to touch 25% as that would necessitate an open offer for another 20%.
Also, it cannot exceed the threshold of 49%, which is the upper limit for a foreign airline’s investment in an Indian carrier. TPG Capital and Indigo Partners were among the companies that submitted EoIs.
Etihad, UAE’s second-largest airline, currently owns 24% in Jet Airways.
The lenders are also poring over a request from Jet Airways CEO Vinay Dube to release interim funding of Rs 1,000 crore.
With the Supreme Court striking down RBI’s February 12, 2018, circular based on which the initial revival plan for Jet was structured banks are trying to address the issue relating to conversion of loans into equity at Rs 1.
The RBI directive had permitted such an option for rejigging debt of companies whose net worth had been wiped out.
Jet shares closed at Rs 260.45 on Friday on the BSE.
According to Manish Raniga, an independent aviation consultant and former vice president of Jet, Jet Airways has every chance of survival provided banks give the much-needed interim funding.
Failure to do so will impact customer experience and add to the list of turnaround activities required to stabilise the business for longterm viability. Potential investors may find Jet less attractive if operations worsen.
The airline is now operating just 6 ATR turboprop planes and one Boeing 737 on its local routes. It had a fleet of 124 planes in December.
Pilots affiliated to a lobbying body on Sunday threatened to boycott operations from midnight over unpaid salaries. The strike was called off in the evening in the hope the lenders will agree to release funds in their meeting with the Jet management on Monday.
The pilots and other crew members, however, plan to gather outside Jet’s corporate office in Mumbai at 9:30 am on Monday. There was a similar gathering on Friday, where upset employees demanded an update on salary arrears.
Jet’s pilots took out a peaceful march outside the Delhi airport on Saturday. Employees have not been paid salaries since January.
Meanwhile, the airline announced the resignation of independent director Rajshree Pathy, chairman, Rajshree Sugars and Chemicals, from its board effective April 13 “owing to time constraints.
The airline has Gaurang Shetty as whole-time director and Robin Kamark as Etihad’s representative, apart from former aviation secretary Ashok Chawla, former director general of civil aviation Nasim Zaidi and former State Bank of India executive Sharad Sharma on its board, according to its website.
Tourism Observer
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