100-word take |  Some tailwind for Jet Airways, but will it be enough?

Jet Airways owes banks nearly Rs 8,000 crore.

Ravi Krishnan

Jet Airways seems one step closer to resolution. On Monday, 29 January, the cash-strapped carrier said it will convene a shareholder meeting next month seeking approval to increase its authorised share capital, convert loans to equity and allow lenders to nominate directors and observers on the board. That looks like a precursor to an equity infusion by large shareholders.

A fresh equity injection and restructuring of debt is a necessary condition for Jet to continue flying. But it is not sufficient. The airline will have to overhaul its operations and structure, beginning with its management. There’s no reason why it should lag rivals on operational parameters.

But that’s not going to be easy. Its promoters are still looking to retain control while potential suitors want a larger say in the running of the airline. Then there’s an equity dilution that existing shareholders will have to contend with. That explains the tepid response in the Jet Airways stock a day later.