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Even as Jet Airways’ lenders are gearing up to invite expressions of interest from prospective investors for the beleaguered airline, its troubles have intensified with lessors asking the Directorate General of Civil Aviation (DGCA) to de-register some of its already grounded aircraft.
De-registeration will allow the lessors to take the aircraft out of the country and lease them to other airlines.
“MC Aviation Partners and Avolon have applied to DGCA to de-register about seven planes between the two. More applications could be made in the coming days if adequate funding is not pumped into the company soon,” said a source close to the development. MC Aviation is the aircraft leasing and trading arm of Japan’s Mitsubishi Corp while Avolon is an aircraft leasing company based in Dublin.
Jet Airways is currently operating only 26 of its original 119-plane fleet. Most of the grounded planes are on lease and lessors are growing impatient as the airline has been unable to clear their dues.
Bidding opens
This comes even as lenders led by State Bank of India are set to invite bids from strategic investors on Saturday. The bidding will remain open till Tuesday, April 9. According to market sources, the Tatas could be among the leading bidders.
Analysts believe the time given to place bids is too short. “With (promoter Naresh) Goyal having quit Jet, Etihad could be interested in Jet. With a very short deadline, there isn’t much time for a buyer to do a full-fledged due diligence and take over the operations. In such times, an existing shareholder like Etihad could have a headstart,” said Ameya joshi, founder of aviation analysis blog Network Thoughts.
Daizy Chawla, Senior Partner, Singh & Associates, said: “The reason why SBI is trying so hard is they do not want to knock the doors of the NCLT (National Company Law Tribunal) as it is a long process. The death of this airline would be very bad, and hence it’s important to find a strategic partner.”
“My guess is that it has to be an Indian buyer and potentially from the airline industry who already has a joint venture with another airline,” remarked Sameer Kalra, founder of Target Investing. “Any company looking to invest in the company would need to do due diligence, and in a matter of few days, a company cannot decide to invest thousands of crores. Thus, it is very hard for a non-aviation investor to come in quickly.”
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