Jet Airways (India) Ltd is confident of the successful outcome of a share sale process initiated by its lenders that will potentially lead to new investors for the grounded airline, chief executive officer Vinay Dube said.
However, with no emergency funds in sight and the likelihood of any investment still a few weeks away, the only task before the Jet Airways management at present is to prepare the groundwork for talks with business partners including aircraft lessors to resume operations once fresh investments are made.
“We have got four weeks plus or minus (a few days) for the bid process to get completed. We remain focused on it. Nothing much is going to happen in four weeks. It is a short period of time," Dube said in an interview.
The company has requested government backing in securing funds for paying at least a month’s salary to employees, Livemint.com reported on Saturday.
State-run lenders led by the State Bank of India (SBI) is carrying out the bidding process for new investors and has shortlisted four suitors who will now submit binding bids. Lenders have told the airline the bidding process will conclude on 10 May. The lenders may however face some hard bargaining from potential investors given Jet Airways has ceased to be a going concern.
The 25-year-old airline halted operations on 17 April after operating its last flight that evening. The airline had an outstanding debt of more than ₹7,000 crore as on 31 December when it made its first default on loan repayments as it battled rising costs and a squeeze on cash flow.
Meanwhile, Jet Airways is continuing to witness an exodus of employees while its aircraft lessors are in talks with rival airlines to redeploy their planes. The government is separately talking to airport operators and other airlines to temporarily re-assign Jet Airways’ slots at airports so that the current capacity crunch in the industry could be bridged to some extent. Dissatisfaction of customers affected by flight cancellations could also impair Jet’s brand and make its revival hard, something that will impact the company’s valuation, according to industry experts.
Dube said it is difficult for pilots and engineers to not have salaries for three months and that the company is trying its best to find a solution. A Jet Airways official, who spoke on condition of anonymity, said some employees have already left the company reluctantly owing to their financial commitments.
“We have had some employees who have left. That is natural considering the circumstances employees face. But we do have sufficient number of employees to see a resurgent Jet Airways," said Dube.
He denied knowledge of any company willing to invest in Jet Airways other than those that have formally expressed their interest in response to the bids called by lenders.
In response to a question on whether Air India will be allowed to operate some of Jet’s grounded planes, Dube said the company’s focus at present is to conclude the bidding process.
Mint reported on 20 April that Air India has written to SBI seeking permission to temporarily operate on lease five Boeing 777 aircraft owned by Jet Airways, which are grounded. Jet Airways’ market share has been declining over the last several months. From over 14% market share at the beginning of last year, it declined to 10% in February 2019 before a complete shutdown of operations in April.