Jet Airways' Options Are Limited After Loan Default
Jet Needed Just One Rupee to Avert This Tailspin
The indebted airline was dragged down by its low-cost rival’s aggressive pricing. Now options are limited and politically fraught, notes Andy Mukherjee in Bloomberg. Jet Airways, India’s second largest airline, has fallen behind even on pilots’ wages. So it was expected that it would soon miss a debt payment, as happened in December 2018.
The airline plans to save $100 million a year on maintenance contracts. But that won’t make its debt problem disappear since it has to repay $900 million in debt by March 2021. Of its fleet of 124 at the end of September, 2018, Jet owns only 16 planes that can be sold while the rest are leased.
Speculation that the Tata Group could rescue Jet has waned, writes Mukherjee. He adds that, nor is it clear if Etihad Airways — which must now regret picking up its 24 percent stake five years ago — would want to back Jet founder Naresh Goyal, the 51 percent owner, once again.
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