Thursday, March 21, 2019

Desperate gamble? SpiceJet tapped to save jobs at Jet Airways, say sources

The Union government is mulling options to save jobs at Jet Airways including asking low-cost carrier SpiceJet to consider taking over some of the debt-laden company’s aircraft, people with knowledge of the matter said.

The proposal involves SpiceJet, led by Chairman Ajay Singh, acquiring as many as 40 of Jet Airways’ grounded planes that are owned by lessors, one of the people said, asking not to be identified as discussions are preliminary. The government has also reached out to other carriers, the person said.

Prime Minister Narendra Modi is keen to avoid the collapse of an airline that employs about 23,000 people, weeks before elections. The need to save jobs at the beleaguered carrier became urgent this week after lenders led by State Bank of India failed to convince Etihad Airways PJSC, which owns 24 per cent of Jet Airways, to infuse funds into the Indian carrier.

Jet Airways has amassed about $1.1 billion of debt and has fallen behind on paying loans and salaries. Once India’s second-biggest airline it has been forced to ground almost two-thirds of its fleet because of its inability to pay lessors. Earlier today an Indian government official said they were trying to revive Jet Airways by changing its management but any decision on the carrier’s future will be a commercial decision by the lenders.

Both SpiceJet and Jet Airways operate Boeing Co.’s 737 planes making it feasible for the budget carrier to fly the aircraft. SpiceJet, which had cash of about $15 million as of Sept. 30, will initially operate a two-class configuration of business and economy under the SpiceJet brand, one of the people said. Lessors have been in discussion with SpiceJet to take over the planes, the person said.
21/03/19 Bloomberg/New Indian Express