Jet Airways flew really high for almost 25 long years, but currently, it had to temporarily suspend all operations due to lack of funds. Sadly, the lenders led by State Bank of India refused ₹983 crore of emergency interim funding to the aviation company.
Are you with Jet Airways? Even if you are, nothing can change the fact that the suspension of its operations is actually attracting companies to buy stakes of Jet Airways.
Not only Jet Airways but Air India is also in the same radar. Both Jet and Air India reported losses in the last financial year and their combined market share is less than 25 percent as on date.
RIL to acquire Jet Airways?
Sources have reported that Mukesh Ambani-led company, Reliance Industries Ltd., has revealed interest in acquiring stakes in the beleaguered Jet Airways. Though, the news cannot be confirmed yet because RIL is not among the parties that submitted an Expression of Interest (EoI) to the lenders for acquiring Jet Airways.
Etihad Airways to join the queue..
Another source reported that UAE-headquartered Etihad Airways may join in the bid at a later date. Etihad has already submitted an EoI to the lenders and already owns 24 percent of Jet Airways.
According to FDI norms, Etihad can acquire a maximum of 49% stake under the automatic route. The FDI norms in civil aviation allow NRIs to acquire 100% in airlines under the automatic route. For more than 49%, it will require government approval. Jet owed ₹8,414 crore to lenders and SBI, which is overseeing the sale process on behalf of lenders, have received five-six EoIs from various parties including equity firms and foreign airlines.
What about Air India?
The government, in March 2018, had issued a preliminary information memorandum with regard to disinvestment process in Air India. Since it did not receive any bids, Arun Jaitley-led ministerial panel postponed the plan to sell 76% government holding. It later decided to sell Air India’s subsidiaries and assets to reduce the national carrier’s debt.
Air India along with Jet Airways?
Sources reported that Reliance might also explore the possibility of buying stakes in Air India and help the carrier come out of its ₹48,781 crore debt.
Jet Airways had a domestic market share of 11.4% in February, and Air India 12.8% whereas Jet had a consolidated market share of 16.8% while that of Air India was 13.2%.
Indigo, the country’s biggest airline carrier has a market share of 43.4 percent. Although the sources have to say a lot, we will wait until RIL officially discloses about its future plans. At this moment let us all hope, Jet Airways gets back to its own two feet along with 16000 employees!