Jet Airways Planes Grounded by Lessors

Yogesh Sarkar

Administrator
Naresh Goyal has stepped down as Chairman of Jet Airways. Banks have agreed to infuse further Rs. 1,500 crores in to the airline and for that, they will be issued 50.1% shares at Rs. 1 each. With less than 30 of Jet Airways original fleet of 119 planes flying, banks are hoping to recover the money by selling of the company by May end.

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A 28-year journey came to an end on Monday as Naresh Goyal, founder chairman of Jet Airways, finally stepped down following pressure from lenders. By doing so, Goyal may have ensured the survival of the airline as his departure was one of the conditions stipulated by lenders, led by State Bank of India, who will now infuse Rs 1,500 crore of emergency funds.

Lenders agreed to pump in funds as this was the only way to keep the airline operational and give them a chance to recover their dues of over Rs 8,000 crore. The government was also keen that the carrier continue to operate as closure would cause large-scale job losses, severely reduce airline capacity in the country and wipe out any chance of creditors recovering their money.

Although the emergency funds will help Jet Airways continue operations, customers will face disruption for a few weeks as several aircraft have been grounded since the tickets were sold. Of its total fleet of 119 aircraft, less than 30 are understood to be now flying. However, bankers say there will be more certainty for those buying tickets now.

Besides getting Naresh Goyal and his wife Anita Goyal and the Etihad representative to step down from the board, banks have also got the company to issue them 11.4 crore shares for Re 1 each, which makes them the largest shareholders with a 50.1% stake. SBI chairman Rajnish Kumar said the shareholding is temporary, and a buyer will be found by end-May 2019. As the sale is happening out of the bankruptcy process, Goyal is not barred from bidding but this is seen as unlikely as he could not come up with even the Rs 750 crore sought by banks. Etihad, whose stake will be halved to just below 12%, will take a call on bidding for the airline by the month-end.

Lenders wanted the promoters out of the airline to facilitate the entry of strategic investors. Banks decided to invite outside investors after promoters failed to bring in the Rs 750 crore demanded by banks.

“This is a decision the creditors have taken because they have kept legitimate self-interest and public interest in mind. The self-interest of the banking system is that the company must survive so that their investment remains and if it prospers they can get back their money, the debt can be serviced,” finance minister Arun Jaitley told a news conference in Delhi.

Jet board has approved the bailout package and agreed to a proposal by banks to have an interim management committee running the airline until an investor comes in. The airline share price rose 12.7% to Rs 254 on Monday following Goyal’s decision to step down.

Goyal, considered a pioneer in Indian aviation in the post-liberalization era, had begun his career as a travel agent and representative of overseas airlines nearly 50 years ago. He started Jet Airways in 1991 and the airline started flying two years later. It became India's largest airline by passenger market share in 2010 after acquiring Air Sahara in 2007.

This competition from low-cost airlines made it difficult for Jet to raise fares. As a result, Jet reported losses in nine of the last 11 years. The company continued to operate as a full-service carrier even as the market started shifting towards no-frills airlines such as Indigo Airlines and SpiceJet. Jet continued to have steady loyalty among business travellers who had locked into the company’s loyalty programme, which is operated by Jet Privileges, a company-owned by Etihad group.

Last year, Arvind Gupta, trustee of Indian Investors Protection Council, the ICICI Bank-Videocon Industries whistleblower, had, in a complaint to the government, alleged that Goyal had siphoned off funds through related party transactions.

Source: ToI
 

deepam

Super User
Naresh Goyal bailed out. If Jet Airways fails to take off; now Naresh Goyal will not be responsible as he is no longer in the board.
Only time will tell whether Jet Airways bounces back and banks gets their money back! Let us hope for the best for our banks and Aviation sector.
 

Yogesh Sarkar

Administrator
Jet Airways pilots have not get their 4 month salary yet and funds from lenders has not arrived either. So they might be going on a strike from the 1st of April.

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The pilots of Jet Airways will stop flying from April 1, since the airline has not got the interim funding from lenders due to which they have not been told about their four month salary dues. The strike may be averted only if a firm commitment on salary payment is made in next two days and some dues are immediately cleared, say sources.

"Dear Members, a part of the expected interim funding from SBI was supposed to be actioned on Friday (March 29). Unfortunately, the fund transfer has not taken place, hence no update on salary payment from the management. The collective decision of pilots taken at Mumbai and Delhi open house effective April 1 2019 prevails," the National Aviators' Guild (NAG), union of Jet Airways' Indian pilots told members late on Friday night.

A Jet spokesperson said: "Jet Airways would like to clearly state that it has been in constant dialogue with pilots to ensure that the current operating schedule is maintained. The airline remains committed to honor its obligations towards all its employees, including Pilots, AMEs (aircraft maintenance engineers) and members of its senior management, and all other employees who have sacrificed more than their fair share to uphold Jet Airways' values, including safety and the airline's operational reliability."

"The Board along with our lenders, are working continuously towards a strong turn around plan which will enable the airline to restore normalcy to its operations. Jet Airways remains grateful to its pilots, engineers and members of its senior management for their patience and understanding during these trying times. To our guests, we sincerely apologise for any inconvenience caused and would like to assure them that every measure is being taken to minimise the disruption to our operating flight schedule," the airline spokesperson added.

Jet has not paid salary to pilots, aircraft maintenance engineers and senior management of past four months.

On March 25, Jet's founder Naresh Goyal had finally stepped down from airline board and as chairman following pressure from lenders. His exit had facilitated the survival of the airline as this was one of the conditions laid down by banks, led by State Bank of India, that was to infuse Rs 1500 crore of emergency funds. Lenders had agreed to pump in funds as this was the only way to ensure that the airline remains operational and they had a chance to recover their debt of over Rs 8,000 crore. Earlier this week SBI and Jet officials had met the aviation ministry.

"The SBI people said emergency funding will be provided at the earliest after some paperwork is complete," an aviation ministry official had said earlier this week.

Source: ToI
 

adsatinder

explorer
Jet Airways to fly 6-7 aircraft on both days this weekend domestically: Aviation Secy

As the crisis in the private airline deepened, the Prime Minister's Office called an urgent meeting to discuss the situation, an official source said.

[email protected]




Cash-strapped Jet Airways will fly six to seven aircraft on both days this weekend on domestic routes, Aviation Secretary P S Kharola said Friday. He also said the airline has been told to ensure that passenger issues are taken into consideration while it deals with the situation.

It has also been told to alert passengers about flight cancellations 48 hours in advance, Kharola said.

"Jet had a meeting with bankers. It has put forth demand of funds. It is currently flying 11 aircraft and will fly six to seven aircraft domestically on both days this weekend. We have asked it to take into consideration issues of passengers," the aviation secretary said.

Currently, Jet Airways is operating less than 50 domestic flights per day. The official said the airline has suspended its international operations till Monday.






As the crisis in the private airline deepened, the Prime Minister's Office called an urgent meeting to discuss the situation, an official source said.

According to sources, the meeting has been called after Civil Aviation Minister Suresh Prabhu asked the secretary of the department to review issues concerning Jet Airways.

Airfares have been on an upswing across India for the last few weeks due to sharp decline in number of flights primarily caused by grounding of around 90 per cent of the 119-aircraft fleet of the cash-strapped Jet Airways.

Amid this, SpiceJet Friday announced it will induct 16 Boeing 737-800 NG aircraft on dry lease to bring down flight cancellations and expand the airline's international and domestic presence.

The availability of flights was also hit by pulling out of SpiceJet's 12 "737 Max" aircraft in March over safety concerns following an Ethiopian Airlines plane crash on March 10.

"SpiceJet will induct 16 Boeing 737-800 NG aircraft on dry lease and has applied to the Directorate General of Civil Aviation (DGCA) for a no objection certificate (NOC) to import the aircraft," the airline said.

"Subject to regulatory approvals, the aircraft would begin joining SpiceJet fleet in the next 10 days," it added.

First Published on Apr 12, 2019 09:54 pm




 

adsatinder

explorer
Jet Airways to suspend all operations from tonight
Jet ran an operation of 6 planes since morning. The decision was taken in the afternoon.
By
Anirban Chowdhury
ET Bureau
Updated: Apr 17, 2019, 06.47 PM IST

Agencies
Jet's fleet is reduced to just five aircrafts and it has suspended its international operations.

MUMBAI: Troubled carrier Jet Airways has decided to temporarily suspend all flights from tonight, with no cash to run operations any further, said a person in the know.

“We got the information just 10 minutes back. We are still trying to process it,” said a person in the know.

While Jet had been running a bare minimum number of 35-40 flights for the last few days, a total grounding will significantly affect its value for potential investors that are undergoing a bidding process to invest in the airline. Jet’s shares yesterday fell close to 20% on rumours of an imminent shutdown. It closed 8% down at about Rs 242 on Tuesday close. Markets were shut on Wednesday.

There are fears of its licence being subsequently suspended if it doesnt get its flights back up. India’s aviation regulator hasn’t referred to any such action yet.

“There is laid down regulation for each situation. We shall follow what is appropriate for a given one,” a senior official at the Directorate General of Civil Aviation told ET.

Jet ran an operation of 6 planes since morning. The decision was taken in the afternoon.

The move came after Jet’s last ditch attempt to raise interim loans to keep the airline running, failed yesterday evening. CEO Vinay Dube had approached the lenders with an appeal for Rs 400 crore. The banks refused to release any funds without additional collateral.

The grounding had been imminent to the airline’s management for sometime, with the skeletal operations just a soupcon of Jet’s original 124-plane network which made it India’s second biggest flyer of passengers till January.

“It’s an emotional day for us. We just want to focus on taking care of staff and guests,” said an executive.

Jet has defaulted on loans as well as vendor and lessor payments. It has been forced to ground planes since the beginning of the year primarily due to defaults to leasing companies. It hasn’t paid its employees since January.

Meanwhile, its lenders have selected Etihad Airways that owns 24% of the airline, PE investors TPG Capital and Indigo Partners as well as the state-run National Investment and Infrastructure Fund as qualified bidders. They have to submit binding bids by May 10. The process to find a buyer will stretch longer. Jet may not have the time.

Jet, India’s oldest surviving private airline, started in 1993 as an air taxi operator and grew to become its biggest carrier with a premium international network. It faced tough competition in the 2000s from competitors such as Air Sahara, Kingfisher Airlines and several low fare carriers such as IndiGo and SpiceJet.

Jet bought Air Sahara in 2007 for Rs 2,050 crore in a deal which troubled it for years later with additional costs, taxes as well as legal and manpower issues. It faced its first major crisis in 2011-12 and subsequently sold 24% stake to Etihad for $379 million in 2013.

The latest crisis started in March 2018 with delayed salary payments for employees and a 25% paycut for top management. It escalated sharply between January and March 2019 with the airline grounding more than 100 planes.




Jet Airways to suspend all operations from tonight
 
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Yogesh Sarkar

Administrator
Jet Airways has suspended all operations. Looks like last ditch effort is being made to reduce the bidding price for whoever takes off the lot.

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NEW DELHI: After raging against the dying of the light for several months, Jet Airways flew gently into the night on Wednesday— at least for now. India’s longest-serving private carrier shut down operations after a 26-year journey, during which it flew 650 flights a day at its peak. The shutdown leaves a huge question mark over the future of over 16,000 direct and 6,000 contractual employees.

Jet will take to the skies again only if it finds a new buyer who revives it.

“Late (Tuesday) night, Jet was informed by SBI, on behalf of the consortium of Indian lenders, that they are unable to consider its request for critical interim funding… the airline will not be able to pay for fuel or other critical services to keep the operations going. Consequently, with immediate effect, Jet Airways is compelled to cancel all international and domestic flights. The last flight will operate Wednesday,” Jet said in a regulatory filing to BSE on Wednesday night while announcing the temporary shutdown.

The airline had on Tuesday sent a final SOS to lenders for Rs 983-crore emergency funding to remain afloat.

Source: ToI
 

citymonk

Super User
As per DGCA, Jet Airways is currently operating just 41 planes out of its original fleet of 119. Add to that, the pilots are now threatening to go on strike, if they are not paid by 31st March 2019.
My advice to Jet Airways Management is to first clear old salary dues of their employees and immediately after this action stop paying any fixed salaries to them. Their Main Problem is High Salary bill as inspite of low fuel prices Jet is not able let both ends meet.
Staff should be paid on commission basis, depending on collections from particular flight.
Such system will bring efficiency in their operations.
I have seen business model of state owned Haryana, Punjab and Himachal roadways buses, they remain in high profits by following this age old system. On other hand DTC, Delhi Transport Corporation operates on fixed salaries system and is making losses year after year. Plus DTC Drivers and Conductors are always cribbing about low salaries.
While a Haryana Roadways counterpart is always happy.
I have seen Conductors providing Cold Drinks, Water Bottles and Newspapers in some class of buses. Plus Drivers need not be paid daily allowance for food and refreshments e.t.c. they happily collect hard cash and free lunches from halting point eateries falling on that route.
If Jet Airways can operate like Haryana Roadways, but unlike DTC, then they will have no Salary or bonus issues , nor any Fuel price problems.
This way Jet Pilots and crew will always remain Happy, bringing lot of Revenue for management after taking their cuts.
 
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adsatinder

explorer
.
If Jet Airways can operate like Haryana Roadways unlike DTC then they will have no Salary or bonus issues , nor any Fuel price problems.
This way Jet Pilots and crew will always remain Happy, bringing lot of Revenue for management after taking their cuts.
Let's start Dhaba on Air highways !
LOL !
 

adsatinder

explorer
Jet Airways grounded LIVE updates: Staff union seeks govt intervention
Jet Airways halted operations temporarily from April 17 after banks rejected the debt-laden carrier's request for emergency funding
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Jet Airways grounded LIVE updates: Staff union seeks govt intervention
 

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explorer
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