Jet Airways crisis: SBI Chairman Rajnish Kumar to meet aviation secretary today to review status of resolution plan

In the ongoing crisis involving the now-grounded Jet Airways with no clear bidder for the debt-laden airline, the SBI Chairman Rajnish Kumar is expected to meet with Aviation Secretary in Narendra Modi's new government that is on its second term.

Lenders of Jet Airways, led by State Bank of India (SBI), were reported to likely take a final decision on the fate of the now-grounded airline in the next two weeks, a media report said.

The grounded carrier shuttered its operations on 17 April and the lenders, led by SBI, are still scouting for investors to revive the airline, which has a debt burden of more than Rs 8,000 crore. While founder Naresh Goyal and his family own 51 percent of Jet Airways, 31.2 percent have been pledged with the lenders.

According to Mint, lenders are yet to receive a formal offer from the Hinduja Group, which had recently said it was evaluating the opportunity to invest in the airline. The report added that lenders have agreed to take a significant haircut and any new investor is expected to seek anywhere between 80 percent to 90 percent haircut from the banks.

 Jet Airways crisis: SBI Chairman Rajnish Kumar to meet aviation secretary today to review status of resolution plan

Representational image. Reuters

According to Moneycontrol, talks between Etihad Airways, the Hinduja Group, and London-based AdiGro Aviation to revive Jet Airways have entered a crucial phase. The report, citing sources, said lenders are now flexible while restructuring Jet Airways' over Rs 8,000 crore debt.

The Hinduja Group reportedly received the approval of the major stakeholders of Jet Airways such as its founder Naresh Goyal and Etihad Airways to go ahead with the bidding process.

While the State Bank of India-led (SBI) lenders' consortium is still working on ways to revive the once-storied Jet Airways, the civil aviation ministry has already awarded the carrier's slots at various airports to other airlines on a temporary basis.

Advantage IndiGo, SpiceJet
Jet Airways’ troubles have allowed IndiGo and other carriers such as SpiceJet to raise prices on some routes, offsetting some of the losses they faced last fiscal year because of high fuel prices and intense competition.

IndiGo’s passenger yield, a measure of airfares, rose 12 percent during the quarter. Interglobe Aviation Ltd, the owner of Indian budget airline IndiGo, forecast a strong year ahead after the collapse of Jet Airways Ltd helped the company report a five-fold jump in fourth-quarter profit.

The grounding of Jet Airways has also impacted the aviation industry's capacity by as much as about 14 percent, and this has resulted in a 4.2 percent fall in domestic air traffic to 10.99 million in April, according to a note by ICRA rating agency.

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 ratings agency said in the note last week.

The moderation in capacity, which started in February when the now-defunct Jet Airways began grounding its fleet in a staggered manner and, which eventually led to shuttering of operations around mid-last month, has also resulted in an increase of 30-40 percent in airfares in March as compared to September last year, ICRA said.

--With PTI inputs

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Updated Date: Jun 01, 2019 09:19:46 IST