Etihad may come to rescue for Jet
Its desperate attempts to raise funds failed miserably eventually leading to its closure.
New Delhi: Etihad could come to rescue of ailing Jet Airways and have jointly begun talks with creditors to get easier terms on loan repayment.
The Abu Dhabi-based carrier, currently, holds 24 per cent in Jet and may raise its current equity holding taking it upto 49 per cent, the highest permissible limit for foreign airlines.
“The airlines are taking to banks on cash flow and business plan,” said an industry executive.
The development points to deteriorating financial health of Jet Airways which has been forced to withdraw dozens of flights to contain losses. It also reminds of crisis in 2012 that forced Vijay Mallya-run Kingfisher Airlines out of business.
Days before going belly up, Kingfisher Airlines was cancelling dozens of flights as it did not have cash to buy even fuel and disburse staff salaries.
Its desperate attempts to raise funds failed miserably eventually leading to its closure.
Jet Airways has also been finding it tough to pay salaries of its staff and owe as much as $400 million to lessors and vendors. It too is facing the wrath of pilots for non-payment of their salaries.
Jet Airways has been in spotlight in recent days with speculation of promoter Naresh Goyal holding discussions with prospective investors such as Tata Group, Etihad Airways PJSC and a consortium of Air France-KLM and Delta Air Lines. But none of them has so far progressed beyond talks.
Last month, Tata group termed its talks with Jet for acquiring a majority stake as preliminary after remaining silent for a few weeks.