Jet, Etihad say airline will 'emerge financially strong, resilient'

NEW DELHI: Abu Dhabi-based Etihad has for the first time officially acknowledged it is working for restructuring of Jet Airways to ensure the airline avoids a Kingfisher-like fate. Jet chairman Naresh Goyal and Etihad CEO Tony Douglas on Monday issued a joint statement, saying the airline’s restructuring is on and that the process will soon be completed. While the exact nature of restructuring has not been stated, it is learnt that once this process is complete Jet will be majority owned by PSU banks and a government-managed investor fund with Goyal’s stake reducing to about 20%.

“Jet Airways, its principal shareholders including Etihad Airways, and key financial stakeholders are working towards the finalisation and subsequent implementation of the Bank-led Provisional Resolution Plan (BLPRP), to ensure that the carrier emerges as a financially strong and resilient airline. The approval of the BLPRP by the board of directors of Jet Airways last week was an important step in this direction. As we move forward, we are confident that once the BLPRP is finalized and implemented, Jet Airways will reemerge as a viable and robust airline to reclaim its rightful place as airline of first choice for its customers,” the joint statement said.

It came a day after twin troubles on Sunday. First there were reports that State Bank of India (SBI) may take Jet to National Company Law Tribunal (NCLT) to recover its loans as it felt the airline was running out of funds for operations. SBI dismissed these reports as ‘speculative’ on Monday.

Secondly, Jet’s pilots who are yet to get their December and January salaries had warned of agitation from March 1 if the airline defaulted its promise of clearing 25% remaining salary of November by this month-end.

To assure the pilots, stakeholders and most importantly passengers who were beginning to have debt over booking tickets on Jet, Goyal and Douglas issued joint statement on Monday. It gave a genesis of the problem that Jet is facing now.

“For a quarter of a century, Jet Airways has set the gold standard for Indian hospitality on-ground and in the skies and worked tirelessly to anticipate, meet and surpass guest expectations. However, in the last year the aviation industry has experienced extraordinary headwinds and challenges. Rising oil prices, a depreciating rupee and market saturation, among other things, have combined to critically impact the civil aviation sector as a whole. Some airlines have been hit harder than others; Jet Airways, India’s premier full-service airline, being one of them. Nevertheless, despite these challenges and higher costs of running a full-service airline in this environment, the airline’s staff have worked tirelessly with sincerity and commitment to continue serving their loyal guests,” it said.

While admitting poor financial health, it lists operating parameters that “demonstrate the unremitting patronage of its Guests and the assiduous efforts of its staff: The airline’s network load factor has risen to a high of 87% through December 2018 and January 2019. In November and December 2018, Jet Airways was ranked No. 1 among all Indian carriers when it came to arrival on-time performance,” it sad.

“The airline’s flight cancellation rate in December 2018 stood at a mere 0.2%, the lowest among Indian carriers which, in total, operate over 10,000 flights. In November, this stood at 0.5%, which was still consistent with other Indian carriers,” it added.