What's Next For Jet Airways After Founder Naresh Goyal's Exit: Ten Points

Lenders led by the State Bank of India plan to infuse Rs 1,500 crore into the troubled airline immediately.

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What's Next For Jet Airways After Founder Naresh Goyal's Exit: Ten Points

Two-thirds of Jet Airways' fleet has been grounded due to non-payment to lessors and other reasons.

New Delhi:  Jet Airways founder-chairman Naresh Goyal and his wife, Anita, resigned from the airline's board of directors today while state-run lenders announced a Rs 1,500 crore bailout plan. The two took the step at a time when a majority of its fleet has been grounded amid non-payment of dues to banks, suppliers, pilots and lessors. The total debt of the troubled airline, founded by Naresh Goyal and his wife in 1993, comes up to about Rs 9,000 crore.
Here are 10 key takeaways from the story:
  1. Shares of Jet Airways jumped by 15.46% on the National Stock Exchange after reports of the Goyals' exit from its board of directors emerged. They closed at 12.69%, up at Rs 254.50 on the Bombay Stock Exchange.
  2. Naresh Goyal's stake has been reduced to 25.5% from 51%, allowing lenders to hold as much as 50.5% of the shareholding. They now plan to infuse Rs 1,500 crore into the troubled airline immediately.
  3. The stake of Abu Dhabi carrier Etihad's stake in the company has also been reduced from 24% to 12% in order to accommodate the lenders, led by the State Bank of India.
  4. An "interim management committee" has been created by lenders to manage daily operations as well as the airline's cash flow, a statement from Jet Airways read.
  5. The Goyals' exit comes amid government concerns over unemployment and turmoil in the airline sector if Jet Airways were to go belly up due to mounting debt and operational failure.   
  6. Of the airline's 119 aircraft, 54 have been grounded due to non-payment of dues to lessors. Another 24 are not being flown due to lack of maintenance.
  7. This means that around two-third of Jet Airways' fleet has been grounded for non-payment to lessors, non-maintenance and other reasons. 
  8. On March 23, Jet Airways had suspended operations to 13 international routes until April-end and reduced flight frequency to seven others.   
  9. Two days prior to that, Jet Airways pilots had urged the centre to push the airline management into releasing salaries withheld for months. They also threatened to stop flying from April 1.
  10. Rival airline IndiGo has said that it is offering jobs to pilots from the cash-strapped airline along with compensation for overdue salaries in an effort to supplement its own staff strength.       




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