Jet Airways future ‘in balance’

The fate of Jet Airways remains in the balance amid reports that founder and majority shareholder Naresh Goyal could exit India’s second-largest airline in return for the “right price”.

Jet Airways’ founder Goyal, shareholder Etihad, a consortium of Indian banks and aircraft lessors have been in talks on a rescue deal since Jet defaulted on loan repayments in December.

The airline, which operates a fleet of 120 aircraft and is India’s second largest carrier, has left staff unpaid and missed payments to aircraft leasing companies.

India’s Economic Times reported discussions now centre on the emergency funding Jet Airways requires, estimated at $35 million, if it is to survive long enough for a financial restructuring.

It reported: “No firm decision has been reached on the funding or its structure.”

India’s banks have reportedly refused to extend further credit to the carrier without fresh investment. But Etihad has told the banks it is “not willing to invest a single penny” without Goyal’s departure.

Goyal has acknowledged “the airline is facing imminent grounding”.

He retains a 51% stake in the carrier he founded in the early 1990s. Abu Dhabi-based Etihad owns 24%.

The Indian government appears keen to avoid Jet Airways being grounded in the run-up to a general election in April-May.

One option appears to be the sale of the airline’s loyalty programme Jet Privilege, which is 50.1% owned by Etihad and, unlike Jet, is profitable and growing.

Jet Airways retains a 49.9% stake in Jet privilege, from which it received $35 million in emergency funding in October.

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