Jet Airways Crisis
Tata Group to provide as much help to Jet Airways Crisis as possible.
Jet Airways Crisis
Naresh Goyal-led Jet Airways is going through Financial turmoil and not only thousands of its Pilots, AMEs and other small Employees, even the Government is worried about its fate as well as impact on Indian Aviation where demand has been soaring, but profits have been elusive for Airlines. Tata Group has come forward to rescue Jet Airways after being prodded by Indian Government.
DGCA and Civil Aviation Ministers has been personally keeping a close watch on Jet Airways I Ltd crisis and asked VCs and Tata Group to provide as much help in the matter
Since the Government is directly involved in the turmoil that the Aviation sector is undergoing, the Government may also give some benefits to Tata Group if it rescues the beleaguered Airlines, claimed sources close the matter.
This may include some relief on bank loans that have been given to Jet Airways in the past and some relief from the Airport Authority of India on its dues to the Jet.
This will ease the Financial burden of the Jet Airways and therefore, will help in its revival.
On Aviation, Indian Government has been working not only to boost the regional Air connectivity but also to bring the Indian Aviation sector at par with global standards.
If Jet Airways fails to revive, this will not only hurt the investment sentiments of the sector will also put a question mark on the Government's management of the sector.
The board of Tata Sons is likely to meet here Friday to vet a proposal to buy out the cash- strapped Jet Airways, which sent its share prices soaring over 26 percent, according to people familiar with the development.
Airline's deputy chief executive and chief Financial officer Amit Agarwal earlier this week had admitted that the company was in talks with "multiple interested parties" for fund infusion as well as selling six of its Boeing 777 planes along with a stake in its loyalty progarmme Jet Privilege.
Tata Sons board is meeting tomorrow (Friday) to consider the proposal to bid for Jet Airways, people in the know of the development told PTI.
While a spokesperson of Tata Sons, which already runs two Airlines--the full-service carrier Vistara in a JV with Singapore Airlines, and the low-cost carrier AirAsia India in JV with Air Asia of Malaysia, refused to comment on the "speculation", Jet Airways did not respond to the queries on the same from PTI.
We do not comment on speculation, a spokesperson at Tata Sons, which originally owned the present national carrier Air India, said when asked for confirmation.
However, the news made it big on the marekt with the Jet Airways counter soaring. The rumour of the rescue deal by the Tatas sent Jet shares zooming 20% on the NSE
to settle at Rs 320. In the past four trading sessions the stock gained over 30% Meanwhile, amidst talks about Government nudging the Tatas to bail out the struggling
Airline in the social media, an aviation ministry official denied that Government is brokering a deal which may include the lenders and other stakeholders of the Naresh Goyal-run Airline taking a haircut. Besides Goyal, who along with his family owns 51 percent stake in the company, Gulf carrier Etihad Airways owns 24 percent in the cash-strapped Airline which earlier this week reported Rs 1,261 crore in losses for the September quarter against a profit of Rs 71 crore y-o-y, making it the third straight quarters of heavy losses.
This had the Airline also putting as many as six of its Boeing 777s on sale to part-fund liquidity. Media reports suggest that the parent company of Vistara, Tata-Singapore Airlines, is looking at all-stock merger with Jet Airways as part of the Tata group's plans to board Goyal's full service carrier.
In an exchange filing, Jet Airways described the media reports as speculative.
"...The subject news is speculative in nature and that there is no discussion or decision in the board which would require a disclosure...," the Airline informed BSE.
According to the media report, the two sides are inching towards a two-step transaction that would first see Jet merging with Tata-SIA that runs Vistara through a share swap to form a new JV, which will have the Goyal family, Etihad, Tata Sons and Singapore Airlines as partners.
We are currently at various stages of discussions with multiple interested parties for both part stake sale in Jet Privilege and fresh equity infusion," Agarwal had tod
analysts during the post-earnings concall Tuesday.
He had also said the company hired investment bankers and consulting firms to carry out these tasks.
The cash crunch in the second largest Airline by market share has resulted in delayed payments to its vendors and salaries to a section of its over 15,000 Employees.
When contacted, Jet Airways officials said that they are not ready to confirm the news with a short reply, 'We will revert back'.
The second half of December is normally a busy schedule for all Airlines, and every year flights are fully- booked from Middle East region on account of Christmas holidays. Many passengers plan their travel at least 3-6 months in advance. If cancellation news is true, then it is going to affect several passengers.
Meantime, other Airlines like Air India Express and SpiceJet that are operating daily from Dubai are expected to raise their ticket price during December, duly taking advantage of cancellation of Jet Airways.
As per Jet Airways online portal, it is clear that, from December 5, 2018, bookings are available from Dubai to Mangaluru only via Mumbai.
Similarly, Abu Dhabi– Mangaluru direct flight details also are not seen for bookings online from December 6.
Earlier in the month of November, Jet Airways allowed Pilots to quit jobs without notice and later it had also announced various cost-cutting measures.
It may also be recalled that, on November 12 this year, Jet Airways decided to sell 6 Boeing 777 Aircraft in a bid to get come out from Financial difficulties.
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