Another Setback For Grounded Jet Airways As It Could Soon Lose Rights To Fly Abroad

Attempts to revive grounded private airline Jet Airways has suffered yet another setback. Even as the consortium of lenders struggles to find a potential buyer for Jet Airways, reports suggest that the airline could soon lose foreign flying rights.

As early as next week, the government could start distributing foreign flying rights of Jet Airways among other carriers, The Economic Times has reported.

REUTERS

According to an aviation ministry official, other carriers have already requested the rights to destinations such as Singapore, Thailand, and the Middle East.

This is bad news for Jet Airways as losing the foreign flying rights could turn away potential buyers.

Meanwhile, a group of frequent flyers of the cash-strapped airline has approached the key lenders, including State Bank of India, ICICI Bank, and Punjab National Bank, to submit the 'Revival of Jet Airways Plan' which they are calling 'Roja'.

AFP

As per the proposal by the group of professionals, led by Sankaran P. Raghunathan, the employees of Jet Airways would first take control of the company under a leveraged buy-out plan (LBO).

They will take a loan from existing lenders and invest in the company, eventually becoming part-owners.

"The banks can give ?1,500 crore loan to the employees. This is six months' salary of each employee as a personal loan. The employees will use this money to buy out a 51 percent stake in the company from SBI and 12.5 percent from Etihad. The balance ?200 crore would be given to the company for new shares. This way the employees will control Jet Airways," said the presentation reviewed by IANS.

In the next step, the plan is to raise money involving frequent flyers.

Accordingly, the banks can be persuaded to give a personal loan to all those who want to buy four tickets each for ?10,000 which would be valid for two years. By pre-selling these tickets, as much as ?8,000 crore could be raised.

BCCL

Jet Airways, once the largest private airline in India has been grounded since April 17 due to an acute cash crunch.

The company which was founded nearly three decades ago had been in a financial mess for the past few years. The company tried multiple options including mass terminations of jobs and reducing flight, but nothing could stop the collapse. With the debts mounting, the lenders' consortium ousted founder and CEO Naresh Goyal and took control of the company. But a refusal to provide fresh funding meant the airline could no longer fly.