In a joint statement that gave away little, Jet Airways and partner Etihad Airways reiterated that they are working towards the finalisation of a bank-led provisional resolution plan. But the statement didn't give any details.
Instead, sources told Moneycontrol that details of the possible deal could come out in the first week of March, when Etihad is expected to meet Jet's lenders, led by State Bank of India.
"The meeting is crucial, and the deal could fructify after that," said an executive from the industry.
The plan was cleared by the Jet Airways board on February 14, and a week later on February 21, it also got the nod of shareholders at an extraordinary general meeting.
The troubled airline, with mounting debt and stiff repayment schedule, was expected to make an announcement on the plan post the shareholders nod. But with reports emerging that Etihad had put in conditions for its investment, it may take a while more before the details are disclosed.
"Jet Airways, its principal shareholders including Etihad Airways, and key financial stakeholders are working towards the finalisation and subsequent implementation of the Bank-led Provisional Resolution Plan (BLPRP), to ensure that the carrier emerges as a financially strong and resilient airline," Jet Airways' Chairman Naresh Goyal and Etihad Airways' Chief Executive Officer Tony Douglas said in a joint statement.
"We are confident that once the BLPRP is finalized and implemented, Jet Airways will reemerge as a viable and robust airline to reclaim its rightful place as an airline of the first choice for its customers," the statement read.
The two partners didn't give a timeline.
Facing liquidity crunch, Jet Airways has been forced to ground aircraft, curtail its flights and delay salaries to its pilots. The carrier has debts of over Rs 8,000 crore, and has to make repayment of about Rs 1,700 crore by end of the March.
The pilots and its union have threatened of non-cooperation if the dues are not cleared.
The carrier has debts of over Rs 8,000 crore, and has to make repayment of about Rs 1,700 crore by end of the March.
The plan
After the allotment of fresh shares, which is part of the plan, banks will become the biggest shareholders of Jet Airways. Goyal's 51 percent stake may come down to 25 percent, and that of Etihad will reduce to 12 percent from the present 24 percent.
But it remains to be seen how much of the debt will be converted to equity by the banks. Also, Etihad may put in more money, thereby increasing its stake in the airline. But it has put in conditions, including relaxation in giving an open offer, which would otherwise get triggered once the stake goes above 25 percent.
"It's not a solution to have banks take control of an airline. They have no experience. At present no details are coming forth, and it's like the banks have bought a first class ticket to Titanic," said Mark Martin, Founder and CEO of Martin Consulting LLC, an aviation advisory and consulting firm.
Goyal and his partner though sought to paint a more optimistic picture in their statement.
They went on to list the challenges faced by the aviation industry over the past year due to rising oil prices, a depreciating rupee and market saturation, among other things. Despite being hit hard, Jet Airways has managed to improve on certain metrics such as network load factor that rose to a high of 87 percent through December 2018 and January 2019.
The note pointed out that in November and December 2018, Jet Airways was ranked No. 1 among all Indian carriers when it came to on-time arrival performance with flight cancellation rate in December 2018 at a mere 0.2 percent, the lowest among Indian carriers.
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