Jet Air pledges JetLite equity to raise R325 crore

New Delhi: Jet Airways, the country’s largest private carrier, has pledged the entire promoters’ equity holding in its low-cost subsidiary JetLite to IDFC for a loan of R325 crore.
Jet had acquired Air Sahara for R1,450 crore in 2007 and renamed it JetLite to strengthen its foothold in the aviation market.
The development once again highlights the grim financial health of airline companies in the backdrop of growing competition, which has forced them to slash fares despite input costs remaining high. Overall, the domestic airline industry is marred by accumulated losses of around of R30,000 crore and a combined debt of over R60,000 crore. For instance, state-owned Air India has huge accumulated losses and is managing to survive on government bailout. Jet's private sector competitor, the Vijay Mallya-owned Kingfisher Airlines, also has a debt of R6,000 crore and is gasping for survival.
05/10/11 Nirbhay Kumar/Financial Express

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Categories: Jet Airways Oct 2011, Jetlite Oct 2011