Jet Airways lenders weigh paying off $30-million US Exim Bank loan & take charge of 6 aircraft
Bankers say payment of the $30-mn is worth it because it could release the six aircraft valued at more than — Rs 2,000 crore from the bank.
Bankers say payment of the $30-million is worth it because it could release the six aircraft valued at more than — Rs 2,000 crore ($300 million) from the bank. These assets can then be leased or used to start limited operations that will be crucial in saving the sinking airline.
“A small amount of loans from the US Exim are pending repayment. If we pay off these loans, the planes which are valued much more than the amount due, will become assets for the airline. Why not we take it over? There is a serious thought along those lines,” said a person familiar with the deliberations.
The delay in resolution for the airline can be damaging as rivals are eyeing Jet Airways’ slots, planes and flying rights which are lucrative in the clogged but growing Indian aviation market. On Monday, ET reported how private sector airlines Indigo, Spicejet, Vistara and GoAir are fighting for the foreign flying rights of Jet Airways which was grounded from mid-April.
Lenders, however, are mindful that all efforts to save the airline will come to nothing if there is no concrete restructuring plan. Etihad Airways, the only eligible bidder, has put preconditions to its bid and seems reluctant to pump in more cash.
“Nobody knows what plan will work out. There were some feelers to the Hinduja Group, but they have no experience in running an airline and will need somebody to manage the show. We still don’t know whether Etihad will partner with the Hindujas so it’s very complicated,” said a second person involved with the resolution process. The banks involved in the turnaround of Jet Airways, have in the past, stated that altering the carrier’s negative net worth and getting it back to the skies will be a big challenge for interested investors.