Jet Airways crisis: Hinduja Group, Etihad Airways fail to strike deal for joint ownership of grounded airline

Diversified Hinduja Group and Etihad Airways have reportedly failed to strike a deal for joint ownership of the now-grounded Jet Airways, a media report said.

Hinduja Group recently said it is evaluating the opportunity to invest in the airline. According to Business Standard, the lenders of the beleaguered airline have expressed reservation to consider unsolicited bids. The report said that officials of Hinduja Group met executives of Etihad in Abu Dhabi to discuss the deal. However, no decision was made regarding the partnership, it added.

According to The Hindu Business Line, the Hinduja Group was considering to invest around Rs 1,000-1,500 crore in Jet Airways as part of a plan to revive the airline. The Hinduja Group, along with Etihad Airways, State Bank of India and London-based AdiGro, was exploring the possibility to create a consortium to own Jet Airways.

On Wednesday, shares of grounded Jet Airways advanced over 5 percent after the Hinduja Group said it was evaluating the opportunity to invest in the airline.

 Jet Airways crisis: Hinduja Group, Etihad Airways fail to strike deal for joint ownership of grounded airline

Representative image. Reuters

On the BSE, the airline's scrip jumped 5.17 percent to close at Rs 158.55. Intra-day, it touched a high of Rs 164.90. On Friday, the stock is trading at Rs 149.20 down 4.11 percent.

Jet Airways shuttered its operations on 17 April and the lenders, led by State Bank of India, are still scouting for investors to revive the airline, which has a debt burden of over Rs 8,000 crore.

The grounding of Jet Airways has impacted the industry's capacity by as much as 14 percent, resulting in a 4.2 percent fall in domestic air traffic to 10.99 million in April, according to Icra.

The domestic passenger traffic remained on an upswing between July 2013 and March 2019, after witnessing year-on-year de-growth in June 2013, the rating agency said in a note on Thursday.

The moderation in capacity, which started in February when Jet Airways began grounding its fleet in a staggered manner, has also resulted in 30-40 percent increase in airfares in March compared to September last year, Icra said.

"This (de-growth in domestic passenger traffic) is primarily attributable to adverse impact on the industry capacity which has been hit hard due to the grounding of Jet Airways aircraft starting February (due to liquidity constraints) and eventual discontinuation of its operations from April 18," Icra added.

--With PTI inputs

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Updated Date: May 24, 2019 14:24:00 IST