Jet Airways (NSE: JETAIRWAYS) share price dives as management considers operations shutdown

Daniel Fowler
April 17, 2019

A senior government official said that funding for Jet Airways from lenders is likely to come through.

The airline, which has been expecting Rs 1,500 crore interim funding from lenders, has failed to get that despite several meetings.

Jet Airways stock plunged as much as 18.56 per cent to Rs 213.20 in the afternoon trade on Tuesday after reports suggested the airline may shut down its operations temporarily. Some of the airlines are also in discussions with lessors to take deregistered aircraft of Jet Airways.

On Monday, Jet Airways CEO Vinay Dube said that the lenders could not decide on the emergency funding and that the airline's board would meet on Tuesday to take a call on the future.

India's Jet Airways flying just 7 planes amid investor talks | AP business
It also announced the resignation of one of its independent directors, Rajshree Pathy, from the company for other commitments. However, on March 31, it deferred the agitation to April 15, saying it wanted to give more time to the new management.

The entire saga of Jet Airways and its likely closure, has been a tale of mismanagement, not just by the promoter Naresh Goyal, but also by the banks themselves who have a combined exposure of over Rs.8,000 crores in an airline, which has recorded a profit only twice in the last 12 years and continues to bleed cash copiously.

In the letter to the lender, the company has highlighted the specific areas that will be immediately impacted, should the funding not be forthcoming, Dube said. In an email to anxious employees CEO Vinay Dube yesterday announced that with the interim funding still not forthcoming, Jet Airways has extended the cancellation of worldwide operations till April 19.

These include private equity firms TPG Capital and Indigo Partners, Indian sovereign wealth fund National Investment and Infrastructure Fund (NIIF), and the UAE's Etihad Airways, which already owns a minority stake in Jet, it said.

"Directed Secretary @MoCA_GoI to review issues related to Jet Airways, especially increasing fares, flight cancellations etc", Prabhu said in a tweet. More than two dozen Jet-operated planes have been de-registered this month, and Jet has been forced to ground dozens more over unpaid dues.

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