- Jet Airways shut down its operations temporarily on April 17 after failing to get a new investor.
- Jet Airways was the first private airline to launch operations in India.
On Friday, Jet Airways Employee Union and UK-based Adi Group announced to jointly bid for acquiring a 75 percent stake in the airline which is facing bankruptcy proceedings.
Plans of Investors
Sanjay Vishwanath, Chairman of Adi Group said at a press conference, “ We want to be the co-owners with employees in perpetuity. We have informed the National Company Law Tribunal (NCLT) through the Resolution Professional about this combination of Adi Group and the employee’s consortium a few days back. Capital is not an issue for us.”
This platform will explore taking control of the airline through the National Company Law Tribunal (NCLT) process. Further, they plan to revive it with better operational efficiency and governance. It will also consider reducing the fleet of aircraft from the current number 110.
Apart from this, Vishwanath added there were four groups to whom Jet owes the money- the Indian lender group, the foreign institution lender group, operational creditors and employees.
In an interview, Vishwanath said, “Adi Partners will acquire 49% of Jet Airways, while the employees’ consortium will hold 26%. Details of how the employees’ consortium will mobilize the funds needed to finance the stake acquisition are being worked out.”
The Numbers Involved
Vishwanath also estimated that Indian lender group is owed about Rs. 8,000 crores, the foreign institutional lenders are owed about Rs. 4,000 crores, roughly about Rs. 600-700 crores to the employees and approximately Rs. 8,000 crores to Rs. 12,000 crore. In total, they are talking about Rs. 25,000 to 26,000 crores in total. Although Sanjay said they don’t have clarity over the numbers and that is what they are asking for.
Profile of Investors
AdiGroup is London-based global conglomerate with presence in the tech sector. Most recently, they have forayed into the acquisition of media, business services, software, and Infrastructure assets to operate under AdiGro platform with long-term institutional investors.
Ashish Mohanty, president of Jet Aircraft Maintenance Engineers Welfare Association said in a statement, “We are committed to co-invest with Adi Partners in our airline and also be flexible with the work environment and salaries so that no stone is left unturned to turn around Jet.”
What happened to Jet?
Jet Airways shut down its operations temporarily on April 17 after failing to rope in new investor and get liquid cash flow in the company. Lenders to the airline decided to drag them to NCLT to start insolvency proceedings against the airline.
It’s sad to see the 26-year old first private sector airline in India going down in such a way. Jet Airways plans to expand overseas aggressively and buying already bankrupt airline Sahara costed them dearly. They also face severe competition from a new group of insurgent low-cost carriers such as IndiGo and SpiceJet.
We can only hope to see them back in operations again.
This shows the cut-throat competition in the Indian domestic air space and the challenge of making money in the aviation sector dominated by low-cost carriers.