From top-level exodus to stock crash: Jet Airways' crisis continues to get worse

From top-level exodus to stock crash: Jet Airways' crisis continues to get worse

From a tumbling stock and taxman concerns to a top level exodus amid desperate attempts to find a suitor, here are some key developments that will have a bearing on Jet Airways' future, if it ever manages to get off the ground again

Even as the lenders to the now wingless Jet Airways scramble to find a suitor, the recent top level exodus has thrown up a lot of new concerns for the airline. CEO Vinay Dube as well as the airline's CFO, company secretary and chief people officer have all put in their papers earlier this week. Here are 10 recent developments that will have a bearing on its future, if it ever manages to get off the ground again:

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  1. Jet Airways' stock is currently trading 2.16% down at around Rs 124 apiece. On Wednesday alone, it had tumbled 6.85 per cent to Rs 120.25 - its 52-week low - on the BSE. This was the third straight day of losses on news of the exodus.
  2. With few top executives now left to steer the debt-ridden airline, the buzz is that the State Bank of India, the lead lender to Jet Airways, may consider putting a court-appointed receiver at the helm. "For this, the lenders will have to approach the National Company Law Tribunal (NCLT) or the High Court," a banking industry source told The Hindu Business Line, adding that the bank may come up with a list of two or three aviation experts for the role.
  3. Of the four entities that had submitted expressions of interest, Etihad, which owns 24% of Jet Airways and is the second largest stakeholder, was reportedly the only one to submit a highly-conditional bid. In addition, the SBI-led consortium of 26 lenders claim to have received a few unsolicited bids for a stake in the troubled airline. Among them, Darwin Platform Group of Companies' officials met SBI Caps on Wednesday "to understand the liability and assets of Jet Airways", its CEO Rahul Ganpule said. His Group has made a Rs 14,000-crore offer to take over the entire liabilities of the airline.
  4. Meanwhile, just days after India-born industrialist brothers, Srichand and GP Hinduja, reclaimed the title of Britain's wealthiest with fortunes of 22 billion pounds to their name, reports suggest that they have been approached to buy a stake in the grounded Jet Airways. The Hinduja Group is expected to meet Etihad executives and Jet Airways' lenders in the coming days. Investors estimate that Jet Airways will need up to Rs 20,000 crore over the next three years to fly again, and the Hindujas certainly boast deep enough pockets to step up to the challenge. Their long-standing interest in the aviation space is only fanning speculation.
  5. The consortium of lenders is currently planning to get all bids legally verified before beginning negotiations with the interested parties. Sources told IANS that the lenders may also try to stitch a deal involving two bidding parties. If this does not work out, they may have to fall back on options like the Debt Recovery Tribunal and NCLT.
  6. As many as 83 planes of the grounded airline have been deregistered since its cash-crunch began. This means that the lessors can take their aircraft out of country and lease them to other players. The DGCA reportedly now has 11 more planes in its sights - it is considering requests to deregister three of Jet Airways' Boeing 737s, six ATRs and two Boeing B777s.
  7. With all the remaining domestic carriers vying for maximum share of the Jet Airways' foreign flying rights, the civil aviation ministry has announced that it will evolve a transparent standard operating procedure (SOP) to allocate these rights on a temporary basis, subject to Jet Airways' revival. This move is an attempt to bring down airfares that have risen dramatically on many international routes since Jet Airways suspended its operations on April 17.
  8. On Wednesday, the National Stock Exchange (NSE) fined Jet Airways, among 250 others, for non-compliance with various listing regulations for the quarter ended March 31, 2019. The exchange has reportedly imposed a fine of Rs 4.15 lakh on the beleaguered airline with a debt of over Rs 8,500 crore.
  9. The income tax department is set to appoint an independent auditor to conduct a special audit of the Jet Airways books. Sources in the know told the Business Standard that this audit is in connection with the commission paid by the airline to its Dubai-based group entities for allegedly evading Rs 850 crore in taxes.
  10. The grounding of Jet Airways along with the troubles with the banned Boeing 737 Max aircraft have hurt the domestic aviation sector. From being one of the world's fastest growing domestic air travel market, India has now dropped down to the 4th position, according to the International Air Transport Association (IATA). According to the trade association, presently, Russia, the US and Japan are the top three growing markets.

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With PTI inputs