That Sinking Feeling
Can Jet be saved? A few days ago, it seemed the final chapter in the airline's saga had been written. The banks, after seizing control of the airline, could not find anyone interested in taking it off their hands.
Every day, more planes were being grounded or seized and flights cancelled. Fuel suppliers were refusing to give any more aviation fuel to even let the remaining planes take to the air. And it seemed only a matter of days before operations of what was once India's premier airline ceased altogether.
Then suddenly, there seemed to be a ray of hope. A number of potential buyers have submitted their respective Expression of Interest (EoI). These apparently include two private equity led bids, a sovereign investment fund, and even Etihad, the Abu Dhabi based airline that has a 24 per cent stake in Jet but had only a few weeks earlier wanted the banks to buy its shares. What's more, even Naresh Goyal, the airline's founder who took it to lofty heights before crash landing it, has thrown his hat in the ring. Goyal's EoI will be closely scrutinised legally as he had earlier refused to bring money. Investors willing to back him will also go through scrutiny. Whether the banks would like to talk to him after ejecting him forcibly late March is open to question, of course.
But a ray of hope is all that these EoIs are for the beleaguered lenders who are collectively owed over Rs 8,500 crore. (This does not include what Jet owes other creditors fuel suppliers, lessors of planes, maintenance agencies, ground handling agencies, employees, etc.)
The issue is that an EoI is not really much. It will be weeks, if not months, before any of these potential buyers submit any binding offers assuming any of them do so at all after examining Jet's assets and liabilities and the terms being offered by the bankers. Even then, there could be lawsuits. And finally, there would be other problems associated with getting an almost grounded airline back in the air and getting customers who have been scared away by the recent events at Jet. Most of all, it will require a lot of cash? about Rs 7,000 crore, if not more, to get most of its fleet back in the air.
The time is
