Etihad in talks to help debt-ridden Jet Airways

Dubai - The 25-year-old Jet Airways has been forced to ground a total of 78 of its 119 aircraft after failing to pay lenders.

Etihad Airways is in discussion with banks and various stakeholders of the debt-ridden Jet Airways to find a solution, the UAE national airline said on Wednesday amid reports about the possible sale of its entire stake in the Indian carrier.
Responding to Khaleej Times' query on its widely reported talks with State Bank of India on selling the entire 24 per cent stakes in Jet Airways, an Etihad spokesperson stated: "As a minority shareholder, Etihad is working closely with Indian lenders, the company and key stakeholders to facilitate a solution for Jet Airways."
According to reports in Indian media, Etihad has formally asked SBI, India's largest lender, to purchase its stake in Jet at Rs150 per share, or for a total consideration of Rs4 billion, as the embattled airline continued to ward off multiple crises including an impending strike by pilots over delayed salary and a looming bankruptcy.
Rajnish Kumar, SBI chairman, said on Wednesday that lenders are making every effort to keep afloat Jet Airways, and putting the airline into bankruptcy is the last option for all stakeholders.
"We believe that it is in everybody's interest that Jet Airways continues to fly," Kumar said, adding that placing Jet into bankruptcy would mean grounding the airline.
The SBI chief said talks with Etihad, Jet's largest shareholder, to secure a rescue deal are in progress while there is the possibility of bringing in a new investor. He said that any decision taken to rescue Jet is a commercial one and is not at the direction of the Indian government.
The Indian government, keen to avert a King Fisher like disaster ahead of next month's Lok Sabah polls, has asked state-run banks and other lenders to come to the rescue of India's second full service airline.
The 25-year-old Jet, reeling under mounting debts of more than $1 billion, has been forced to ground a total of 78 of its 119 aircraft after failing to pay lenders and aircraft lessors following the grounding six more planes on Wednesday. A total collapse of the 25-year-old airline will lead of heavy job losses of more than 20,000 people.
Announcing its latest grounding, the airline said on late Tuesday it was "actively engaging" with lenders to secure fresh liquidity and wanted to minimise disruption as hundreds of guests, who were left stranded, clamouring for new flight tickets and refunds.
The relentless debt woes of Jet Airways, for several years in a row, have snowballed to such an extent that its operations could grind to a halt any time now amid threats by suppliers, pilots and aircraft lessors to pull the plug.
Plagued by fluctuating crude prices, a weak rupee and fierce competition from budget rivals, the severity of Jet's liquidity crunch came to the fore when it failed to report its quarterly earnings or pay its staff on time. Despite a recent $1.19 billion bailout secured from lenders to bridge a funding gap, it sank deeper into trouble.
A spokesperson for the National Aviator's Guild warned on Wednesday that pilots would stop flying from April 1, 2019 if the company does not disburse due salaries and take concrete decisions.
India's aviation regulator has warned Jet Airways to ensure that staffers facing stress are not forced to operate flights.
- issacjohn@khaleejtimes.com