Taxman orders special audit of Jet Airways

Mumbai: The income tax department has ordered a special audit of Jet Airways, after investigations by its arms found a number of suspicious-looking transactions in the accounts of the now-grounded airline, people in the know said.
 The department has engaged chartered accountancy firm Shah & Taparia to carry out the special audit, the people said.
 “While the investigation wing in its report has detailed out tax irregularities of over Rs 880 crore, the assessment wing has found a lot of other suspicious transactions which amount to over Rs 5,000 crore … these transactions require a thorough probe and a special audit has been ordered,” said an official in the know.
 According to the provision that allows the assessing officer (AO) to get the accounts of an assessee audited by a chartered accountant, such a decision can be made based on the complexity and volume of accounts, where there are doubts about the correctness of the accounts and multiplicity of transactions, and when the assessee is engaged in a specialised business activity. One of the main reasons behind calling for the special audit is the alleged non-cooperation by the airline’s promoter, Naresh Goyal, said the people.
“Goyal has always evaded the questions asked by the AO and has claimed ignorance. He has blamed everything on the erstwhile management claiming that he wasn’t managing the day-to-day affairs of the company and therefore wasn’t aware of the various transactions with which he was confronted,” said an official. “Also, with the erstwhile employees, who were responsible for preparing the audit and managing the affairs of the company, no more associated with the grounded airline, it was difficult to understand certain transactions,” the official added.
 22/01/20 Rashmi Rajput/Economic Times

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In Jet Airways' absence, Air India does its best in 5 years. But guess who gained the most?

In the first three months of 2019, the Naresh Goyal-founded airline saw its numbers falling drastically, ending the March quarter with a share of 8.9 percent. That dropped to 0.8 percent in April, when Jet Airways last operated a flight.
Overall, it ended the year with a market share of 2.3 percent. Each of Jet Airways’ private peers -- IndiGo, GoAir, SpiceJet, Vistara and AirAsia -- benefited from its absence.
Read how >>

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Jet Privilege's fresh start as InterMiles

Last year loyalty and rewards management company Jet Privilege Pvt Ltd (JPPL) unveiled a new brand identity 'InterMiles' as part of its growth strategy. The company plans to launch a 360 degree consumer campaign across print, digital, social media and outdoor media including airports and Will be reaching out to members through mailers and SMS campaigns.

Five years ago JPPL was carved out as a separate entity from the now-grounded Jet Airways and has close to 10 million members. The interchangeable nature of the rewards currency is the highlight of this revamp identity, where points can be earned and redeemed across platforms including airlines, hotels, dine, shop, and fuel.
InterMiles, will encompass both loyalty and rewards programmes (previously, Jet Privilege) and the ubiquitous rewards and recognition currency (previously, JPMiles). The immediate focus of the brand is to consolidate growth in the travel space including flights and hotel stays.

JPPL is a part of Etihad Aviation Group, which holds 50.1 per cent stake. Its members can earn and redeem 'InterMiles' across more than 10 categories and over 150 programme partners. The company is working towards a platform model, an aggregator across categories since the last five years.
"InterMiles is an enabler of our members’ entire travel and lifestyle needs from flights to any destination to stay and experiences at the destination. Our growth plan includes aggregating benefits and simplifying access to a choice of experiences and rewards across 10+ categories. We are constantly expanding our vast partner network to offer diverse InterMiles earning opportunities across 10+ categories to our members," said Zameer Kochar, VP, marketing and member engagement, Jet Privilege Pvt. Ltd.
21/01/20 Namit Singh Sengar/Brand Equity

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Jet Airways’ fall was everyone else’s gain

Jet Airways’ collapse in April last year proved to be a boon for low-cost airlines IndiGo and SpiceJet as they emerged the biggest gainers in market shares in the passenger segment.
Satish Nandgaonkar (Mumbai Mirror) writes how >>

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Hinduja Group loses interest in Jet Airways but two suitors still in fray

UK-based Hinduja Group did not submit its interest for Jet Airways Ltd by the Wednesday deadline, a lender that is part of the airline’s committee of creditors told VCCircle, locking shares of the airline in the lower circuit band of 5% at Rs 47.75 on the BSE on Thursday.

On the brighter side, South America-based Synergy Group and New Delhi-headquartered asset reconstruction company Prudent ARC Ltd have put in their expressions of interest, the lender said.

Now, the binding bids have to be submitted by February 15.

In December, the committee of creditors called for a fresh round of expressions of interest, the decision coming after the National Company Law Tribunal (NCLT) approved extending the period for Jet’s insolvency resolution by 90 days.

The NCLT had also directed the creditors to expedite their decision on seeking fresh bids after two new undisclosed investors had shown interest in the grounded airline. By then, Synergy Group was the sole known potential bidder for Jet.

A senior executive at State Bank of India, leader of the 26-member banks’ consortium to Jet, is not too optimistic of the resolution plans so far. “We are yet to see the financial capability and strength of Prudent ARC and Synergy Group,” the person said.
16/01/20 Beena Parmar/VCCircle

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India's Jet Airways to sell Netherlands business to KLM

Bankrupt Indian airline Jet Airways Ltd (JET.NS) said it had agreed to sell its assets in Netherlands to Dutch airline KLM.
If the deal is finalised, it will only involve a sale of part of the company’s business and not impact the shareholding pattern, Jet said in a statement dated Jan. 16. It did not detail the assets held in Netherlands.
Once India’s biggest private carrier, Jet stopped flying in April after running out of cash, leaving thousands without jobs and pushing up air fares across the country.
It was admitted to bankruptcy court in June after its lenders, led by State Bank of India SBI.NS, failed to agree on a revival plan.
17/01/20 Reuters

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Jet Airways insolvency: The good, the bad and the ugly

The good news. Jet Airways has got an expression of interest (EoI) from two suitors - South America’s Synergy Group and New Delhi-based Prudent ARC Ltd.
The bad news? Many of the questions around the revival of the airline still remain.
While Synergy submitted its interest on January 6, little-known Prudent ARC put in the EoI on January 15, the deadline.
The interest would come as a relief for Jet Airways lenders, who are hoping to recover more than Rs 8,000 crore in dues. The airline’s total liability is over Rs 20,000 crore. The airline suspended operations in April.
The two suitors will now go through the eligibility test. If they clear the hurdle, they will need to submit bids by February 17.
For Synergy, which emerged as the sole suitor for Jet Airways in September, this would be familiar territory. In 2019, too, the group submitted its EoI but failed to submit a bid despite several extensions in deadlines.
Importantly, many of the questions around its interest remain.
It still has not got an Indian partner, which is necessary to qualify as a bidder. Indian regulations allow foreign companies only 49 percent stake in airlines, and the operational control also remains with the local partner. Despite reaching out to many companies, Synergy is yet to get a partner.
16/01/20 Prince Mathews Thomas/moneycontrol.com

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No promising buyers: Jet Airways lenders working to monetise assets

Two entities expressed interest in the grounded Jet Airways till Wednesday, the last day for submitting expressions of interest (EoIs). While the Colombian Synergy Group is one, the other is a fund. The Hinduja Group, which was understood to be interested in the carrier, has not submitted an EoI so far, sources told FE.

Meanwhile, lenders have begun the process of asset monetisation in the absence of a promising bidder. The committee of creditors (CoC) to Jet Airways on Monday passed a resolution to sell one aircraft and two erstwhile slots of Jet Airways at the Schiphol airport to KLM Royal Dutch Airlines.


Further extensions for EoI submission is unlikely. “Till the deadline, the Hinduja Group did not put in a bid. The CoC has agreed to sell one of the aircraft to KLM along with two slots. The sale proposal is for $23 million,” a senior official aware of the developments told FE.

Ashish Chhawchharia, the resolution professional, is working out the details of the deal with representatives of the Dutch airline and the US Exim Bank, which currently has “first charge on the proceeds of sale” of the aircraft in question, along with five other aircraft.

“It looks easier to do the liquidation process now, even though we are still hopeful. We have already talked to KLM and US Exim bank on the sale, but KLM has to formally agree to the CoC’s terms. If the sale goes through, KLM will pay $13 million to the lease holders (US Exim Bank), after which the bank will release charge on all six aircraft. We will have to take a call on what to do with the remaining five aircraft. The payment will be staggered, $3 million would go towards corporate insolvency resolution process expenses. The rest of the proceeds will go towards payment of dues to secured lenders,” the official said.

In December, the CoC had called for fresh EoIs for the grounded Jet Airways after Synergy Group, which at the time was the only interested party, did not give a concrete business plan after over four months of deliberations. The group had sought assurance from the government of Jet’s erstwhile slots in the London Heathrow Airport and the Schiphol Airport in Amsterdam. The fresh call for EoIs was followed by reports that the Hinduja Group was re-looking at bidding for the airline.

However, the Hinduja group, which last year could not conclude talks with Etihad Airways to invest in Jet Airways, stayed away this time as well.
16/01/20 Anwesha Ganguly/Financial Express

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Jet Airways attracts interest from Delhi-based Prudent ARC

Grounded Indian airline Jet Airways received just one more expression of interest (EoI) from a prospective bidder – Delhi-based Prudent ARC (Asset Reconstruction Company) - by the end of the deadline on Wednesday, dimming the prospects of a revival for the beleaguered carrier.

South America-based Synergy Group had filed the EoI for Jet Airways on January 6, taking the number of prospective bidders in the fray for Jet Airways to two.

Ashish Chhawchharia, the resolution professional appointed for the debt-strapped airline, informed the Mumbai bench of National Company Law Tribunal (NCLT) during a hearing on Wednesday that Jet Airways has received two EoIs.
The next date of hearing on the Jet Airways resolution case at the NCLT is February 15.

London-based Indian business group Hinduja Group and a Dubai-based investment fund were also said to be looking to bid for Jet Airways.

Aviation industry sources said both the Hinduja Group and the Dubai fund have decided against submitting the EoI, as they found no value in the airline after their preliminary assessment of the airline’s fundamentals. 
This is the second time that the State Bank of India (SBI)-led lenders’ consortium to Jet called for EoIs.
The first round of bidding did not result in any resolution plan for the revival of the airline, as the Synergy Group – the lone bidder – failed to submit a concrete bidding and revival plan, despite being given ample time by extending the deadline time and again.
16/01/20 James Mathew/Arabian Business

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Synergy Group, Prudent ARC submit Expressions of Interest for Jet Airways

Mumbai: South American conglomerate Synergy Group and Delhi-based Prudent ARC are understood to have submitted expressions of interest (EoIs) to acquire Jet Airways. Now, all eyes will be on the February 8 deadline for the two potential bidders to present their formal resolution plans for the beleaguered airline.
The Hinduja Group, which was reported to be interested, has not submitted an EoI. Today (Thursday) was the last day for the submission of EoIs. “Hinduja wasn’t interested in placing a bid for the airline. It was a rumour,” said a source.
The stock prices of Jet Airways have been rallying for the past three days.
The airline’s Resolution Professional (RP) was unavailable to comment on the bids. As on October 20, total claims against Jet stood at ₹36,090 crore, of which the RP has so far admitted over ₹14,640 crore.
15/01/20 Forum Gandhi/Business Line

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Release funds for interim finance, NCLT tells Jet Airways’ lenders

Mumbai: The bankruptcy court has directed Jet Airways’ lenders to release funds as per an earlier direction to meet the grounded airline’s interim financial requirements, warning that they could otherwise be held for contempt of court.
 The Mumbai bench of the National Company Law Tribunal (NCLT) on Wednesday instructed banks to release the funds to complete the corporate insolvency resolution process, saying that lapse by the committee of creditors (CoC) on this could deplete the value of the airline.
 “The CoC needs to release the funds by January 20, failing which the bench will be constrained to take action for contempt of court,” the bench led by Bhaskara Pantula Mohan said. The share of banks in interim financing was approved in the first meeting of the CoC held in July, where the lenders had decided to release collectively Rs. 63 crore. However, so far, only State Bank of India has released its share of Rs. 10 crore.
Other lenders include Yes Bank, Indian Overseas Bank, Punjab National Bank, IDBI Bank and Axis Bank. IDBI Bank and Indian Overseas Bank have shown an inability to release the funds citing the Reserve Bank of India’s prompt corrective action (PCA) that they are currently undergoing.
 09/01/20 Maulik Vyas/Economic Times

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Jet Airways insolvency: IDBI Bank and IOB say cant fund the process further

 The insolvency proceedings of grounded Jet Airways have hit yet another snag after two of its lenders, IDBI Bank and Indian Overseas Bank, on Wednesday sought an exemption from releasing funds as they are under the central bank’s prompt corrective action (PCA) framework.

The two banks’ plea coincided with NCLT’s warning to Jet CoC of contempt proceedings if they do not release interim funds to the resolution professional by January 20 for completion of insolvency proceedings.

“We again reiterate and instruct the constituents of CoC to forthwith release the amounts as required by the RP so that the process of corporate insolvency resolution process (CIRP) can be completed and the asset value (of Jet Airways) is protected,” said Justice Bhaskar Pantula Mohan, one of the member judges of the Mumbai-bench of NCLT. He also said pilots should be considered assets of the company and their interests should be protected.

IDBI Bank has filed an application with the NCLT seeking exemption from paying for Jet’s insolvency process. The bench directed both IDBI Bank and IOB to approach the RBI on the matter. “It is also directed that the CoC members who filed applications before this bench seeking exemption from further contribution of funds shall have to approach the relevant authorities to seek exemptions, so that they be able to contribute the necessary funds by the next date approved by this bench,” said Justice Mohan. The matter will be heard again on February 19.

Under the Reserve Bank of India’s guidelines, banks that have poor asset quality and capital base would come under the PCA framework. Banks under PCA are required to restrict their risk-weighted assets. Without adequate funding, all attempts to revive the cash-strapped airline could meet an abrupt end.
09/01/20 Anwesha Ganguly/Financial Express

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Jet Airways receives two expressions of interest

Jet Airways has received two Expressions of Interest (EoI), Ashish Chhawchharia, the Resolution Professional appointed for the debt-strapped airline informed the Mumbai bench of NCLT during a hearing on Wednesday.

The RP also informed the insolvency tribunal that two more EoIs are expected ahead of the January 15 deadline.

BusinessLine had reported that South American conglomerate, Synergy Group, had submitted its EoI on Sunday. The company had submitted an EoI earlier, but lenders decided to go for a fresh round of EoI after some other companies showed interest.

While there is no confirmation so far on the other bidders, Hinduja Group, Turbo Aviation and a Dubai-based fund have emerged as interested parties.

During the hearing, the RP told the court that the second EoI had come from a high networth, non-aviation company.

In November 2019, the insolvency court had directed the Committee of Creditors (CoC) to release their share of the interim funding for the Corporate Insolvency Resolution Process (CIRP).

The RP told the court that the CoC had not released its share so far. The court has directed the CoC to release funds immediately in order to avoid contempt.
08/01/20 Business Line

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What will a buyer of Jet Airways get now?

As the Expression of Interest (EOI) deadline for Jet Airways approaches, rumors are abuzz about renewed interest in the airline. Several stakeholders are still hopeful that a bid comes through.

The Synergy Group and the Hindujas, among others, have shown an interest in buying the airline. Jet Airways, after all, was a prized asset and an airline that flew the Indian skies for over 25 years. It shut down after running out of cash.

But what exactly does a buyer get? Answers Satyendra Pandey >>

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Synergy Group gives new expression of interest for beleaguered Jet Airways

South America-based Synergy Group has again given a formal Expression of Interest (EoI) for beleaguered Jet Airways, sources said.

The latest deadline for EoI applications is January 15, the Committee of Creditors (CoC) had decided at their latest meeting.
There were reports that the Hinduja Group would also apply but the sources say this is yet to happen.

Synergy had given an EoI for Jet in the first round of bidding. However, it failed to give a debt resolution plan for the airline company, even after getting several extensions. The lenders subsequently decided to call afresh for EoIs.

Synergy is led by Bolivian-born Germán Efromovich. It owns majority stake in Avianca Airlines, the continent’s second largest.

The Resolution Professional appointed for Jet had earlier told the National Company Law Tribunal that two other entities had expressed early interest in investing. However, it is unclear if they will still do so. One of these is from West Asia and the other is an Indian entity, backed by a British investor.

In the first round of bidding, Synergy had questions for the civil avaition ministry on availability of slots in the domestic and international routes. It wanted answers to these before giving a resolution plan. The ministry wanted a resolution plan on the table before giving any assurance on slot allocation.

Jet’s share price has gained in the past five trading days. On Monday, it closed at Rs 35.90.
07/01/20 Subrata Panda/Business Standard

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Kolkata: Jet ex-staffers find jobs with other airlines, airport

Kolkata: Around half the employees of grounded airline Jet Airways in Kolkata and a section of its contractual staff have found re-employment at a time when jobs are scarce not just in the city but all over the country.

Around 200 regular employees and 600 contractual staffers were rendered jobless last year when the premium airline had suddenly gone bust. Some of the employees had not received salaries for three months.

This is an intelligent — and a very humane — response to a grave problem. We also hope the inline baggage scanner roll-out keeps to the current deadline.

While the situation had appeared extremely bleak in the days and months following the crisis, nearly 100 employees and 70 pilots had been absorbed by other carriers. IndiGo — that has now emerged as the largest airline in the country — has taken a bulk of erstwhile Jet Airways pilots and retrained them for its aircraft fleet. SpiceJet and Go Air, too, employed a chunk of the rest.

Around 34 staffers from Jet Airways’s security department in Kolkata, have also been taken in as dedicated baggage screeners by the airport operator for the inline baggage screening facility that is slated to begin next month.

“ILBS operation requires specialized screeners. Hence, we selected 80 such personnel who are currently undergoing on-job training at airports where the system is functional. Among them, there are a number of Jet Airways staffers who had lost their jobs. Since they have experience of working at this airport for several years and the expertise to operate standalone X-ray baggage scanners, we gave some of the Jet Airways staffers priority during the recruitment process. However, all such trainees need to appear for a test conducted by Bureau of Civil Aviation Security,” said airport director Kaushik Bhattacharjee.

However, senior and midlevel ground staffers, particularly those above 40 and many with over 15 years of experience, are still waiting for the right opportunity. Many have tried out different jobs but quit as they did not fit the profile. Most of them are still hoping that Jet Airways will revive.
03/01/20 Tamaghna Banerjee/Times of India

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Jet Airways lenders meeting Thursday: May extend deadline for submission of EoI

A handful of suitors have shown some sort of interest in Jet Airways and so the company is likely to hold a meeting today and may extend the deadline for submission of expression of interest (EoI), say sources.

The response for both the rounds of bidding that the lenders had tried earlier for Jet Airways since the company was admitted into National Company Law Tribunal (NCLT) had been very poor. However, now the lenders are hoping that Hinduja Group may come forward because the chairman of the group had made a statement that they would be interested in bidding for Jet.

According to sources, the lenders have now decided to consider extending the bid deadline for submission of EoI, which was earlier set for January 6, 2020, as they are hopeful of one more player coming forward.
Interestingly, one of the Dubai-based funds has already submitted an EoI for Jet. There was also another domestic fund backed by a UK entity, which has previously shown interest, say sources.

However, Synergy Group which was the sole bidder in the first round but had not submitted a binding bid and so one is not hopeful of them coming back this time around.
02/01/20 CNBC TV18

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Air India’s int’l revenue soars with some help from Jet closure

New Delhi: The grounding of Jet Airways helped national carrier Air India boost its revenue from international operations by 20% during the first eight months of this financial year, a huge gain considering the single-digit increase during the year-earlier period.
“The increase in numbers is despite the closure of Pakistani airspace, which impacted not only our international operations but that of all carriers using that route,” said a senior Air India official who did not want to be identified.
Pakistan closed its airspace on February 26 last year in the wake of IAF fighter jets striking a Jaish-e-Mohammed terrorist training camp in Balakot. The closure was lifted in mid-July and Indian carriers lost an estimated over Rs 700 crore, of which Rs 400 crore was by Air India alone.
Jet Airways, which was grounded in April last year, had the biggest international network among Indian carriers and its closure helped Air India fill its planes and add revenue.
The national carrier, however, could not cash in on Jet’s absence in the domestic market due to competition from Vistara and IndiGo. Domestic revenue climbed 10%, in line with growth last year.
Air India’s total revenue from both international and domestic passengers rose 16.4% to Rs 15,056 crore during the April-November 2019 period from Rs 12,936 crore a year earlier. While revenue from international flights rose 19.9% to Rs 9,859 crore from Rs 8,220 crore, domestic revenue rose by 10% to Rs 5,197 crore.
On the back of the higher revenue, Air India also turned Ebitdapositive with earnings of ?177 crore compared with a loss of ?535 crore a year earlier.
The improvement in Air India’s key indicators comes as the government prepares to sell Air India after a failed attempt in 2018, when the airline did not receive any bids.
The government is being cautious this time and has offered 100% stake in the airline, substantial restructuring of debt and liabilities and freedom to the new owner to allow voluntarily retirement for employees.
02/01/20 Mihir Mishra/Economic Times

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Jet Airways hits the roof on buzz Hinduja brothers preparing bid

Jet Airways (India) was locked in an upper circuit of 5% at Rs 29.6 after the media reported that UK-based Hinduja Group, run by brothers Gopich and Hinduja and Ashok Hinduja, is preparing a bid to buy the grounded air carrier.
The group plans to submit an expression of interest by the 15 January deadline, signaling its intent to make a formal offer. Hinduja is seeking a partner to bid, the reports added.


Hinduja Group had earlier this year considered bidding for Jet Airways in partnership with Etihad, but Etihad jettisoned the proposal, dealing a severe blow to efforts aimed at rescuing the debt-laden airliner that has suspended flights for nearly two months.

After Jet Airways went bust in mid-April, the government temporarily allotted the hundreds of airport slots owned by it to other carriers, with an aim to contain soaring airfares in the peak holiday season.

Jet Airways was admitted for insolvency on 20 June 2019, after lenders failed to sell the grounded airline. The National Company Law Tribunal (NCLT) on 20 December 2019 allowed Ashish Chhawchharia, resolution professional (RP) for Jet Airways, to extend the corporate insolvency resolution process (CIRP) of the grounded airline by 90 days. Earlier this month, the RP had sought an extension for the resolution period after the Colombian Synergy Group failed to submit a business plan for the revival of Jet Airways by 16 December.
31/12/19 Business Standard

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737 Max grounding, Jet crisis may drag down passenger growth to 4%: Crisil

Non-revival of Jet Airways, coupled with grounding of the Boeing 737 Max planes, is expected to drag down domestic passenger growth to 3-4 per cent in 2019-20 as against 14 per cent in the previous financial year, rating agency CRISIL said on Tuesday.

The domestic traffic data in the April-September period, during which the passenger volume grew a mere 2 per cent, also reflects this estimate, rating agency said in its aviation outlook note.
On a calendar year basis, the domestic air traffic grew only 3.86 per cent in the January-November period of this year, way below an 18.60 per cent growth recorded in the January-December period of 2018.

"Crisil expects domestic air passenger traffic growth in India to slow to 3-4 per cent in fiscal 2020 from 14 per cent in fiscal 2019, considering the non-revival of Jet Airways and grounding of Boeing 737 Max aircraft," Hetal Gandhi, director at Crisil Research, stated in the outlook note.

This was also reflected in the data for the first half of 2019-20 where domestic passenger traffic growth was a mere 2 per cent, she added.

Jet Airways, which is currently under insolvency proceedings, ceased operations in April after lenders refused further capital injection in the carrier amid a debt of Rs 8,500 crore.

Moreover, the global ban on Boeing 737 MAX aircraft following two deadly accidents dealt a blow to many airlines world over, including SpiceJet, which has chalked out its growth plan around these latest fuel-efficient single-aisle planes.
31/12/19 PTI/Business Standard

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