Jet Airways Saga: Lenders Make Contingency Plan In Case Of No Bids


In a huge respite to passengers reeling under the impact of exorbitant fares since the grounding of Jet Airways, national carrier Air India on Friday said it will sell last-minutes tickets at a "hefty discount".

Lenders of Jet Airways led by the state-run State Bank of India (SBI) had mandated SBICaps to initiate the process of selling the airline to recover their dues of over Rs 8,400 crore.

This is expected to bring some relief for fliers as after the shutting down of operations by Jet Airways, the capacity intake of the Indian aviation sector went down, leading to an increase in demand and as such, a hike of 20 to 40 per cent in ticket prices.

The consortium of 26 lenders which now owns 51 pc in the airline, had invited expressions of interest between April 8 and 12 and had received four preliminary bids.

Etihad Airways and a few unsolicited parties have offered to acquire stake in the grounded Jet Airways, PTI quoted the State Bank of India as saying on Friday. The lenders are offering 31.2%-75% stake in the company on a fully diluted basis.

In the wake of crisis-hit Jet Airways suspending operations, the ministry made a decision to allocate the vacant slots at the airports in the national capital and Mumbai to other carriers. Once India's largest private airline, Jet stopped all flights from April 17 after its lenders, led by SBI, refused to extend more funds to keep the carrier flying.

While some of the aviation experts have raised concerns on the government's decision to allot Jet's domestic slots and worldwide traffic rights to rival airlines, suggesting it will impact investor sentiment, a few industry insiders do expect surprise bidding in the final few hours. But several potential investors had at least one condition - Jet's founder and former chairman Naresh Goyal must cede control. "Some may, later on, declare that so and so firm or person is their partner", said an airline executive closely monitoring the bidding process.