Mumbai: Jet Airways (India) Ltd on Friday deferred plans to sell stake in Jet Privilege, its frequent flyer programme that the Naresh Goyal-led management had repeatedly called a lifeline for the beleaguered airline. The decision comes a day after the Jet Airways board approved a bailout plan that takes away Goyal’s position as majority shareholder of the company.

The company has identified potential buyers for sale and SLB (sale and lease back) of 16 aircraft, including many wide-body planes owned by the carrier, its chief financial officer Amit Agarwal said in an analyst call.

Jet Airways has 123 aircraft, according to its website. Of these, it owns 16 aircraft, mostly wide-body planes. The rest are on SLB from lessors.

Proceedings from the sale will be utilized to service debt, Agarwal said. “We will continue to work for JPPL (Jet Privilege Pvt. Ltd) stake sale at a later date," he said.

Jet Privilege was incorporated in 2012 as a wholly-owned unit of Jet Airways, but was hived off as an independent entity in 2014 after Etihad Airways PJSC bought a 50.1% stake for $150 million valuing the firm at $300 million. Etihad’s investment in Jet Privielge was part of its overall $600 million investment in Jet Airways announced in April 2013.

On Point Loyalty, a global management consultancy focused on airline loyalty programmes, had valued Jet Privilege at $1.131 billion (about 7,300 crore) last year, based on the average rupee exchange rate in November.

Over the years, frequent-flyer programmes have become profit centres for airlines globally. Many airlines are said to be making higher profits by tying up with mileage partners such as banks, hotels and credit card companies. It remains to be seen if under the new ownership of the company, the airline will look to monetize Jet Privilege.

Jet Airways had on 14 February approved a bailout plan that allowed its domestic lenders, led by State Bank of India (SBI), to convert their loans into equity, also making them its largest shareholders.

The airline had earlier defaulted on interest payment obligations.

The banks-led provisional debt resolution plan, approved by the Jet Airways board, proposes restructuring under provisions of the Reserve Bank of India (RBI) to meet a funding gap of nearly 8,500 crore. The gap is to be met through a mix of equity infusion, debt restructuring, sale, SLB, and refinancing of aircraft, among others.

“Banks will not become promoters (of Jet Airways)," Agarwal said during the analysts call.

The airline’s chief executive officer Vinay Dube said that Jet Airways will remain a professionally-run company where the management reports to the board of directors. The company, which has delayed payment of dues to several of its lessors and vendors, hopes to mitigate the situation in the coming days.

At present, Jet Airways has aircraft-related debt of about 1,700 crore. The airline had a net debt of 8,052 crore on 30 September 2018.

Agarwal said that the airline is working well with all stakeholders "to manage a win-win situation for all sides" on the issue of overdue of credits.

However, air fares, which had declined because of intense competition among carriers, have seen a rise during the October to December 2018 period.

“The domestic pricing (airfare) has improved. This improvement was necessary for the market," Agarwal said, adding he is unsure if the current pricing-levels are sustainable.

On Friday, Jet Airways shares rose 2.99% to 232.55 apiece on the BSE, outperforming the benchmark Sensex that fell 0.19% to 35,808.95 points.

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