India 'asks banks to rescue Jet Airways'

[Technics 1210]

https://www.bbc.co.uk/news/business-47626409

The Indian government has asked state-run banks to step in and save struggling carrier Jet Airlines, according to Reuters.

India has urged the banks to swap debt for equity, and take stakes in Jet, the news agency said.

With more than $1bn (£750m) in debt, the airline has had to delay payments to banks, employees, suppliers and even aircraft lessors.

India wants to avoid job losses ahead of a general election, Reuters added.

The government has been asking state-run banks including SBI and Punjab National Bank (PNB) as well as the 49% state-owned National Investment and Infrastructure Fund (NIIF) to take at least a third of the airline until new buyer can be found, the news agency said.

At the heart of this crisis is Naresh Goyal, the founder of the airline.

Etihad, which owns a 24% stake in Jet Airways, had agreed to pump in more money and take control of the airline.

But the deal got stuck after Mr Goyal refused to step down as Jet Airways chairman.

The same thing happened a few months ago when India's largest conglomerate the Tata group also showed interest in buying the airline, but then stepped back when Mr Goyal refused to resign from the board.

Reports now suggest that Etihad wants to sell off its entire 24% in the airline and exit the business.

Jet Airways was India's largest carrier in the 2000s, but it started to lose market share after the entry of low-cost airlines like IndiGo & SpiceJet, who were able to optimise costs and make money in this hotly contested aviation market.

With a huge aircraft fleet and permissions to fly on many valuable international routes, Jet Airways is an attractive proposition for many investors in the market.

But their condition is simple - that Mr Goyal and his family, that own a majority stake in the airline, need to exit the business.

Analysts say Mr Goyal's stubbornness in not stepping down is making it difficult for the airline to find investors.

Given that elections are round the corner, the government is putting in effort to rescue the airline.

But even Indian banks are wary of investing in the airline given its precarious situation.

Meanwhile, the airline's aircraft maintenance engineers' union has written to the Indian aviation regulator to say that that three months of salary is overdue, and flight safety "is at risk", the Press Trust of India reports.

The Jet Aircraft Engineers Welfare Association (JAMEWA) said it had been hard for engineers to meet their own financial commitments, adversely affecting their "psychological condition".

"Therefore the safety of public transport airplanes being flown by Jet Airways across India and the world is at risk," it said.

Planes grounded

Jet Airways has been having to ground planes due to its financial woes.

It has 103 aircraft in its fleet, and flies on 600 domestic and 380 international routes.

But for now, it only has 41 aircraft operating.

Industry regulator the Directorate General of Civil Aviation has asked the airline to refund passengers, or provided alternative flights, if they are cancelled.

First Kingfisher, then Air India, now Jet Airlines.

The question has to be asked here, if the Indian economy is booming, and the population is over 1 Billion, are these Indian airlines flying empty planes? Or is there not enough demand? Or perhaps not enough wad in the pockets of the Indian middle class? Or outright corruption?

I bet Airbus were thinking they could sell A380s with 800+ configuration in India, but something is clearly not working!

 

[Realromeo]

Sad I like Jetairways, better than Air India for sure. Jetairways made nearly 150 orders of the grounded 737MAX that is looking bad as well.

 

[jusarrived]

https://www.bbc.co.uk/news/business-47626409



First Kingfisher, then Air India, now Jet Airlines.

The question has to be asked here, if the Indian economy is booming, and the population is over 1 Billion, are these Indian airlines flying empty planes? Or is there not enough demand? Or perhaps not enough wad in the pockets of the Indian middle class? Or outright corruption?

I bet Airbus were thinking they could sell A380s with 800+ configuration in India, but something is clearly not working!

Domestic air travel has doubled to 120 Million in just last 5-6 years .

The industry in general is very capital intensive , rising fuel costs and some of the regulations makes it very difficult to make money and add to the fact that India is a very price sensitive market the air tickets have stayed constant or have become cheaper in last 20 years .

 

[GBK_Fan]

You know someone knows nothing about economics when they use airlines to judge an economy

 

[Kroll]

Only recently started flying from Manchester to Mumbai and is quite busy so surprised to hear it was in this much trouble.

 

[Realromeo]

Only recently started flying from Manchester to Mumbai and is quite busy so surprised to hear it was in this much trouble.

The issue is with domestic routes. Jet Airways through international routes are pretty busy since they are the cheapest options and get filled very quickly. Most profitable domestic routes are to and from Bangalore, Delhi and Mumbai. Rest generally lose money.

 

[Bhaijaan]

https://www.bbc.co.uk/news/business-47626409



First Kingfisher, then Air India, now Jet Airlines.

The question has to be asked here, if the Indian economy is booming, and the population is over 1 Billion, are these Indian airlines flying empty planes? Or is there not enough demand? Or perhaps not enough wad in the pockets of the Indian middle class? Or outright corruption?

I bet Airbus were thinking they could sell A380s with 800+ configuration in India, but something is clearly not working!

You missed the answer in the article itself :-

''Jet Airways was India's largest carrier in the 2000s, but it started to lose market share after the entry of low-cost airlines like IndiGo & SpiceJet, who were able to optimise costs and make money in this hotly contested aviation market.''

Air travel in India is booming.

Delhi alone will be having 3 airports by the next decade as per reports.

 

[Technics 1210]

Jet Airways halts all international flights

Passengers are stranded in India and around the world after Jet Airways suspended all international flights.

Flights from London, Paris and Amsterdam are among those grounded amid fears about the survival of India's largest private airline.

The airline cancelled all international flights until Monday when, according to reports, it will meet its lenders again to try to secure funding.

Jet Airways is saddled with more than $1bn (£765m) of debt.

It is seeking a financial lifeline to avoid collapse and, on Thursday, grounded 10 planes over unpaid fees to leasing firms .

These were the latest flights to be grounded and it was not clear how many of its fleet of more than 100 planes was still in operation. Local reports suggested that it was barely a dozen.

The airline flies on 600 domestic and 380 international routes - but carriers in India must maintain a fleet of least 20 aircraft to continue to operate international services.

https://www.bbc.co.uk/news/business-47905089

This is what bankruptcy looks like.

 

[Gabbar Singh]

<blockquote class="twitter-tweet" data-lang="en-gb"><p lang="en" dir="ltr">Jet to suspend all flights tonight, fails to get emergency funds: Reports <a href="https://t.co/eS03RB7UBs">https://t.co/eS03RB7UBs</a><br><br>Live coverage on <a href="https://t.co/hMlRpgrUU6">https://t.co/hMlRpgrUU6</a> and NDTV 24x7 <a href="https://twitter.com/hashtag/JetAirways?src=hash&ref_src=twsrc%5Etfw">#JetAirways</a> <a href="https://twitter.com/hashtag/JetAirwaysCrisis?src=hash&ref_src=twsrc%5Etfw">#JetAirwaysCrisis</a> <a href="https://t.co/mra6yayv9x">pic.twitter.com/mra6yayv9x</a></p>— NDTV (@ndtv) <a href="https://twitter.com/ndtv/status/1118496421840183297?ref_src=twsrc%5Etfw">17 April 2019</a></blockquote>
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<blockquote class="twitter-tweet" data-lang="en-gb"><p lang="en" dir="ltr">The Taste:The sudden fall of Jet Airways marks the collapse of one of the country’s few world class brands & tells us that even if you run a quality operation with sincere & dedicated employees, that’s not enough to guarantee your survival in today’s India<a href="https://t.co/LbySfk9TP0">https://t.co/LbySfk9TP0</a></p>— vir sanghvi (@virsanghvi) <a href="https://twitter.com/virsanghvi/status/1118143979793657857?ref_src=twsrc%5Etfw">16 April 2019</a></blockquote>
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[Canford Cliffs]

Bcoz of Jet cricis...all flights to India became expensive. BA is charging 1000 pounds for a normal journey (up and down) to Mumbai which ususally costs around 600 odd pound.

 

[Technics 1210]

Bcoz of Jet cricis...all flights to India became expensive. BA is charging 1000 pounds for a normal journey (up and down) to Mumbai which ususally costs around 600 odd pound.

Irrelevant considering BA is neither bankrupt, nor seeking a bailout.

Your country added $1 TRILLION last year, yet cannot keep a fleet of jets in service.

Diddums.

 

[MenInG]

Troubled Indian airline Jet Airways has temporarily suspended all its domestic and international flights after failing to find fresh funding.

The airline said its last flight would operate on Wednesday as it was not able to pay for fuel and other critical services.

Jet Airways said it had no choice but to suspend the flights, but hopes to start flying again.

It has $1.2bn (£900m) debt and has been in talks with lenders for weeks.

With 123 planes, Jet Airways is India's biggest private airline, but reports say that just five planes have been in use.

In a statement the airline said it had been forced to ground all its flights because "prolonged and sustained efforts with lenders and authorities did not yield the desired results".

The Indian government had asked state-run banks to step in with a bailout plan for the airline - which employs 23,000 people and was founded by Naresh Goyal more than 25 years ago. He stepped down as chairman last month

Pilots, engineers, and ground staff have not been paid for months, and passengers have been left stranded around the world as a result of cancellations.

"Late last night, Jet Airways was informed by the State Bank of India (SBI), on behalf of the consortium of Indian lenders, that they are unable to consider its request for critical interim funding," the airline said.

"Since no emergency funding from the lenders or any other source is forthcoming, the airline will not be able to pay for fuel or other critical services to keep the operations going. Consequently, with immediate effect, Jet Airways is compelled to cancel all its international and domestic flights. The last flight will operate today," it added.

The banks have been seeking a bidder for the airline, which said it would continue to support them in their efforts.

Etihad Airways already owns 24% of Jet Airways and is reported to have expressed an interest in taking more control.

"Jet Airways is hopeful that it will be able to bring the joy of flying back to its guests as soon as possible," the airline said.

It operated 600 domestic and 380 international routes, including out of London, Amsterdam and Paris, and had grown rapidly before it started to lose market share after the entry of low-cost airlines like IndiGo & SpiceJet.

The UK's Civil Aviation Authority tweeted advice to customers, outlining different approaches for seeking refunds depending on how the flight was booked.

Jet Airways had said earlier on Wednesday it was working to "minimise guest inconvenience" by using its contact centres and social media teams.

"In parallel, the airline's management and its key stakeholders including its consortium of lenders, continue to work closely towards resolving the current situation," a spokesman had said.

"The airline regrets the inconvenience caused to its guests," they added.

https://www.bbc.com/news/business-47963536

 

[ahsan17]

To be consistent with the Indian logic around the release of their pilot, this airline must be cancelling flights because of Pakistan closing their airspace to India.

 

[gani999]

Irrelevant considering BA is neither bankrupt, nor seeking a bailout.

Your country added $1 TRILLION last year, yet cannot keep a fleet of jets in service.

Diddums.

Airlines have closed down all over the world due to bad management, even in rich countries. So I don't see your argument.

And yes, prices have gone up on the London - Delhi/Mumbai sectors. Jet was the largest operator on these routes with 42 fights a week.

 

[Technics 1210]

Airlines have closed down all over the world due to bad management, even in rich countries. So I don't see your argument.

And yes, prices have gone up on the London - Delhi/Mumbai sectors. Jet was the largest operator on these routes with 42 fights a week.

Jet Airways was not a victim of bad management per se, it had a list of controversies associated with it.

Also the fact you cite ONE route out of nearly 60 as an excuse, not forgetting domestic routes, says a lot.

My point was ultimately, in a booming economy, people pay because they have money, and with the booming airline industry in India, and the new airports, clearly there is not shortage of passengers, but importantly the average passenger from India couldn't afford the ticket prices, hence routes were not full.

 

[Canford Cliffs]

Irrelevant considering BA is neither bankrupt, nor seeking a bailout.

Your country added $1 TRILLION last year, yet cannot keep a fleet of jets in service.

Diddums.

How did I miss this gem of a post

Dude...I mean really?

When did I ever say BA is bankrupt and seeking a bailout. In pure economics...have you heard about Demand = supply? Jet used to operate atleast 4 flights daily from heathrow to India (Mum/Del). With it being closed..demand increased for BA flights and other direct flights to India. As a result all airlines have increased their fare. Its simple economics of demand and supply.

I am a gold member of BA and know a things or two about them.

 

[Canford Cliffs]

Jet Airways was not a victim of bad management per se, it had a list of controversies associated with it.

Also the fact you cite ONE route out of nearly 60 as an excuse, not forgetting domestic routes, says a lot.

My point was ultimately, in a booming economy, people pay because they have money, and with the booming airline industry in India, and the new airports, clearly there is not shortage of passengers, but importantly the average passenger from India couldn't afford the ticket prices, hence routes were not full.

So in a booming economy a company cant go bankrupt? What happened to Lehman Brothers? Pls google.

 

[Technics 1210]

How did I miss this gem of a post

Dude...I mean really?

When did I ever say BA is bankrupt and seeking a bailout. In pure economics...have you heard about Demand = supply? Jet used to operate atleast 4 flights daily from heathrow to India (Mum/Del). With it being closed..demand increased for BA flights and other direct flights to India. As a result all airlines have increased their fare. Its simple economics of demand and supply.

I am a gold member of BA and know a things or two about them.

The fact you only pointed out one route sums up your understanding. I don't care how many flights Jet used to operate from LHR to BOM.

Don't talk about supply and demand when India boasts the second largest populous country in the world, where it's economy is booming, and more than half the people want to leave the country.

Don;t you get it? If people were willing to pay over the odds for BA flights, why not Jet flights? Let this sink in.

You are a BA gold member? WOW! Have a gold star.

 

[Technics 1210]

So in a booming economy a company cant go bankrupt? What happened to Lehman Brothers? Pls google.

Lehmans didn't go bust during a boom, it went bust after the boom was over - well after Bear Sterns and Northern Rock.

Go Google and read up on the facts.

 

[Canford Cliffs]

The fact you only pointed out one route sums up your understanding. I don't care how many flights Jet used to operate from LHR to BOM.

Don't talk about supply and demand when India boasts the second largest populous country in the world, where it's economy is booming, and more than half the people want to leave the country.

Don;t you get it? If people were willing to pay over the odds for BA flights, why not Jet flights? Let this sink in.

You are a BA gold member? WOW! Have a gold star.

Jet didnt went bankrupt bcoz people were not buying tickets. It was one of the best and frequently used flights in India. Jet's financial woes can be traced back to the 2006 purchase of Air Sahara for $500 mn in cash. Pls do some research before making everything anti-India dude.

 

[Canford Cliffs]

Lehmans didn't go bust during a boom, it went bust after the boom was over - well after Bear Sterns and Northern Rock.

Go Google and read up on the facts.

You said how can a company go bankrupt in booming economy....I gave an example of LB. America is a booming economy, right? And it was a booming economy in 2008 as well. Why didnt American govt saved Lehman Brothers then? What happened to Carillion PLC recently in UK? Afterall Britain is a booming economy right? Why it still went bankrupt?

 

[Technics 1210]

Jet didnt went bankrupt bcoz people were not buying tickets. It was one of the best and frequently used flights in India. Jet's financial woes can be traced back to the 2006 purchase of Air Sahara for $500 mn in cash. Pls do some research before making everything anti-India dude.

Now you are changing your tune. First it was LHR-BOM route, now it was a purchase.

Jet was in profit during 2016 and 2017. What happened after? Go read up.

Please stick to collecting air miles.

 

[Technics 1210]

You said how can a company go bankrupt in booming economy....I gave an example of LB. America is a booming economy, right? And it was a booming economy in 2008 as well. Why didnt American govt saved Lehman Brothers then? What happened to Carillion PLC recently in UK? Afterall Britain is a booming economy right? Why it still went bankrupt?

Doh! The point is India's economy is not as rosy as it seems!

Get it?

 

[Canford Cliffs]

Doh! The point is India's economy is not as rosy as it seems!

Get it?

No I dont get it...neither does global economy forum.

https://www.focus-economics.com/blog/the-largest-economies-in-the-world

You can whine though

 

[Technics 1210]

No I dont get it...neither does global economy forum.

https://www.focus-economics.com/blog/the-largest-economies-in-the-world

You can whine though

A booming economy benefits all the classes, in India the gap between rich and poor, upper and lower caste, and religions keeps expanding.

You got some front though.

Why do you even care about Jet Airways when you are a Gold BA member?

 

[Canford Cliffs]

A booming economy benefits all the classes, in India the gap between rich and poor, upper and lower caste, and religions keeps expanding.

You got some front though.

Why do you even care about Jet Airways when you are a Gold BA member?

Oh okay...I can see you already going defensive. So from 'India is not a booming economy' myth busted...you went to why do I care...lol.

 

[Realromeo]

My dad has a flight from Mumbai(via chennai) to London on the 30th . He is not going to be happy hearing this.

 

[Technics 1210]

Oh okay...I can see you already going defensive. So from 'India is not a booming economy' myth busted...you went to why do I care...lol.

You couldn't answer the financial questions of Jet Airways; blamed it on a route, changed your story to an investment. You are only here to defend Mahabharat, yet have never supported anything Indian, including the airline you presumably flew on to go back home.

Come back prepared next time.

 

[MosheD]

https://www.bloomberg.com/news/arti...aid-to-halt-flights-after-wrestling-with-debt

Indian carriers, including Jet, have seen their profits hurt by the world’s highest jet-fuel taxes and a price war worsened by the entry of low-cost, no-frills airlines such as IndiGo and SpiceJet Ltd. that offered dirt-cheap fares with lower overheads.

Foreign carriers from Malaysia’s low-cost AirAsia Group Bhd. to Singapore Airlines Ltd. and Jet’s minority shareholder Etihad, have all learnt how hard it is to make money in Indian skies.

Air India, the state carrier, has been propped up on bailouts from the exchequer for years. AirAsia, which entered in 2014 with a vow to break even in four months, is still nowhere close to its goal. Vistara, Singapore Air’s joint venture with the Tata Group that started in 2015, has yet to make any money. SpiceJet had almost collapsed in 2014.

The only exception in the sector is Indigo, run by Interglobe Aviation Ltd., which has reported annual profits since 2011 and whose stock has soared 33 percent this year. Spicejet, which has been on the mend, has also advanced as it leases more aircraft and starts more flights on the New Delhi-Mumbai route.

Air fares are expected to rise in the coming weeks, possibly denting the passenger growth story that was making India the world’s quickest-growing aviation market. Jet’s decision to stop flying will also push the fares higher.

 

[jagatk]

You couldn't answer the financial questions of Jet Airways; blamed it on a route, changed your story to an investment. You are only here to defend Mahabharat, yet have never supported anything Indian, including the airline you presumably flew on to go back home.

Come back prepared next time.

It's funny how you question someone else's bias when you clearly started a thread just to try and further the whole narrative that India isn't growing that you Pakistanis so like to dream.

Jet, Air India and kingfisher have little in common, their downfalls have come about at different times for very different reasons and yet you combine them because together they further your agenda.

Jet is suffering because it can't compete with the no frills airlines today, Air India was a well run company until past government thought it was a good idea to merge it with Indian airlines and this isn't something recent. It has been an ever deepening hole for more than a decade now. Kingfisher was another one that got hurt because of stupid expansion decisions, it was working pretty well not making money but doing ok until malya decided to get into no frills market by acquiring air deccan and that killed it.

India has a very high jet fuel tax, approx 30-40% of airlines cost is jet fuel. That hurts them competitively. A recent study showed than Indians spent 18bn on air travel in 2018. Also economy booming and particular sectors doing well or badly have little to do with each other. Tech sector has been going great with likes of fb, Google etc minting money didn't stop Yahoo being sold to Verizon for pennies did it?

 

[Technics 1210]

Jet is suffering because it can't compete with the no frills airlines today, Air India was a well run company until past government thought it was a good idea to merge it with Indian airlines and this isn't something recent. It has been an ever deepening hole for more than a decade now. Kingfisher was another one that got hurt because of stupid expansion decisions, it was working pretty well not making money but doing ok until malya decided to get into no frills market by acquiring air deccan and that killed it.

India has a very high jet fuel tax, approx 30-40% of airlines cost is jet fuel. That hurts them competitively. A recent study showed than Indians spent 18bn on air travel in 2018. Also economy booming and particular sectors doing well or badly have little to do with each other. Tech sector has been going great with likes of fb, Google etc minting money didn't stop Yahoo being sold to Verizon for pennies did it?

Jet was in profit in 2016 and 2017.

Yahoo still exists.

 

[jagatk]

Jet was in profit in 2016 and 2017.

Yahoo still exists.

That's because rupee was stronger then and more importantly the fuel prices had hit rock bottom, weaker rupee + higher fuel prices, is not a good thing for you when your market share is going down as you aren't adapting to the no frills airlines and you are losing to foreign airlines who give a similar service.

Their domestic share was around 20% in 2015 in 2018 it had fallen to 15%, they have been accumulating debt for a while, this year it broke the camel's back.

Yahoo the brand exists, it is now a part of verizon, if someone buys Jet tomorrow they aren't going to liquidate it, they will continue running it, the same way verizon is running yahoo.

 

[SensiblePakFan]

James Hogan really left Etihad in a big mess. Money hog.

 

[Abdullah719]

<blockquote class="twitter-tweet" data-lang="en"><p lang="en" dir="ltr"><a href="https://twitter.com/hashtag/JetAirways?src=hash&ref_src=twsrc%5Etfw">#JetAirways</a> employee commits suicide, jumping off building in Maharashtra's Palghar<a href="https://t.co/4aDSEP1n8t">https://t.co/4aDSEP1n8t</a></p>— ABP News (@abpnewstv) <a href="https://twitter.com/abpnewstv/status/1122173713133096965?ref_src=twsrc%5Etfw">April 27, 2019</a></blockquote>
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