Etihad in rescue talks with bankers for Jet Airways
Jet Airways and second-largest shareholder Etihad Airways have been holding rescue talks with bankers of the indebted Indian carrier, three people aware of the matter told Reuters yesterday.
Executives of the airlines met State Bank of India officials in recent days to discuss Jet’s cash flow and business plan, two of the people said.
One said Jet has outstanding dues of about $400mn, mainly owed to lessors and vendors.
Etihad is also considering raising its stake above the 24% it has held since 2013, said one of the people, who declined to be identified as the talks were private. Foreigners can own up to 49% of an Indian carrier.
The news sent Jet’s stock up as much as 3% in early trade before closing down 5.5%. Jet and State Bank of India did not respond to requests for comment.
Jet, controlled by founder Naresh Goyal, is India’s biggest full-service carrier by market share, serving one of the world’s fastest-growing domestic aviation markets. Yet the market is dominated by low-cost carriers such as Interglobe Aviation’s IndiGo, and is blighted by high fuel prices, a weak rupee and price competition.
More cash from Etihad is not guaranteed considering its own financial state, one of the people said. The airline reported a $1.52bn annual loss for 2017 due in part to insolvency partnerships Alitalia and Air Berlin. However, there is also the fear that Jet will struggle to survive without further investment, the person said.