The Foreign Investment Promotion Board (FIPB) on Monday cleared Abu Dhabi-based Etihad Airlines buying 26 per cent stake in Jet Airways for Rs 2,058 crore (Rs 20.58 billion) with some conditions.
After 18 months of closure, what really could be salvaged? And the answer sadly is, precious little, Patience, perseverance and plenty of moolah is the way forward even assuming intent is in place, says Anjuli Bhargava.
Crisis-hit Go First has sought various interim directions from the National Company Law Tribunal, including restraining lessors from taking back aircraft and regulator DGCA from taking any adverse action against the airline. The Wadia group-owned airline, which has liabilities worth Rs 11,463 crore, has sought voluntary insolvency resolution proceedings and the plea is set to be heard by the Delhi bench of the NCLT on Thursday. Go First has cancelled all its flights for three days starting from May 3.
Move aims to comply with Sebi's norm
Carrier in denial, even as Paramount looks for a buy.
While the airline is accommodating passengers on available flights, this is resulting in extending travel time and detour for customers.
Naresh Goyal only gave an undertaking not to sell any of his 51% stake in return for raising working capital debt from PNB.
Jet Airways India on Saturday reported a 11.4 per cent decline in net profit at Rs 68.59 crore (Rs 685.9 million) for the second quarter September 30, 2005 as against Rs 77.42 crore (Rs 774.2 million) in the quarter ended September 30, 2004.
Carriers like Indian, Jet Airways, Kingfisher Airlines and Paramount Airways, apart from a host of start-up airlines, are sewing up deals to acquire 50-70 seater aircraft for less congested routes.
The deal will improve debt-equity to a manageable level of 3.8 and support its share price, thereby lessening the pain for shareholders.
Sebi wanted Jet to convince it that the deal did not amount to joint control alongside promoter Naresh Goyal.
In an emotionally-charged letter to the 22,000-strong employees, Goyal said the approval of the debt-recast plan will put the carrier on a "sounder and sustainable" financial footing.
The airline will utilise new Airbus A320s, scheduled for delivery this year, to accommodate much of the increased frequencies.
Objections were being raised by senior Bharatiya Janata Party leader Jaswant Singh, Communist Party of India's Gurudas Dasgupta, Dinesh Trivedi (Trinamool Congress) and Janata Party chief Subramanian Swamy over the deal, each of whom had shot off separate letters to Prime Minister Manmohan Singh.
Besides expanding the equity base of the premier Indian carrier, a major reason for Goyal to dilute part of his shareholding in Jet from 80 per cent has been the FIPB order to bring it down to regulatory levels.
The Rs 2,058 crore (Rs 20.58 billion) deal between Jet Airways and Etihad Airways will benefit passengers, as increased competition will bring down air fares, aviation sector experts said.
Over 70 per cent of Jet's fleet has been grounded, leading to massive cancellations.
A special court in Mumbai on Monday rejected Jet Airways founder Naresh Goyal's applications seeking medical checkup by his personal doctor on regular basis and home-cooked food inside prison.
With the airline's operations suspended, how are you navigating this crisis?
Naresh Goyal, after being ousted with his wife from the board last week, and with his shareholding halved to 25 per cent, can still make a comeback by partnering a new investor and win back majority control.
Earlier on Wednesday, a bomb squad rushed to the spot after the airlines received the threat call and the plane was taken to an isolated area and the passengers were asked to de-plane the aircraft.
In terms of traded volume, 19.47 lakh shares were traded on the BSE, while over 1 crore shares were traded on the NSE.
Under the fare policy announced, domestic passengers opting for lowest fares will not be served complimentary meals
The move comes amid expectations that the government would allow foreign airlines to invest directly in Indian carriers.
The change in ownership is necessary to conform to the government's foreign direct investment norms in aviation.
Jet Airways on Friday suspended their crew for allowing playback singer Sonu Nigam to sing from the aircraft's address system during a flight.
Describing the over Rs 2,000 crore (Rs 20 billion) business proposal between Jet and Etihad airlines as a win-win deal, Civil Aviation Minister Ajit Singh on Thursday said it will be beneficial for flyers.
Etihad has been in talks for a 24 per cent equity stake in Jet, valued at around $300 million, ever since India relaxed ownership rules and allowed foreign airlines to buy up to 49 per cent in local carriers.
Jet Airways and IndiGo on Friday announced launching of more flights to Dubai from India.
The company is actively engaged with all its aircraft lessors and regularly providing them with updates on the efforts taken to improve liquidity.
Abu Dhabi-based carrier seeks a cut in premium it had agreed to pay on Jet's stock price
Or else customers will face capacity shortages and high fares.
Weeks before shutting down operations on April 17, a logistics vendor had taken possession of a Jet aircraft--a Boeing 777--at the Amsterdam airport for non-payment of dues.
Days after SpiceJet offloaded a differently-abled person from a flight, Jet Airways has been accused of showing apathetic behaviour towards a disabled woman, even as the airline and aviation regulator Directorate General of Civil Aviation launched separate probes into the incident.
Sources close to the deal say, besides a higher stake (earlier, the negotiations were on for sale of up to 24 per cent), Etihad has asked for its representation on the board of the Indian airline, in sync with its shareholding.
Shares of Jet Airways surged 16 per cent to close at Rs 505.7 on Friday on speculation that Etihad Airways might buy 24 per cent in the company.
The winning bid attracted over 99 per cent votes, with lenders overwhelmingly voting for a revival instead of recovery through liquidation.
Jet Airways shares fall as much as 13.6 per cent after media reported that the deal with Etihad may be called off.
Jet Airways has executed a memorandum of understanding/letter of intent for taking five planes on lease.
