Goyal withdraws bid to regain control of Jet

Naresh Goyal, the founder of Jet Airways, has withdrawn his bid to regain control of the airline. 

Goyal had submitted his expression of interest to the lenders on April 12. 

According to sources, Goyal has exited the lender-driven process as some bankers were not keen on supporting his application. 

“Though the application by Goyal was legally compliant, there were other issues at play in the discussion. Some of the other bidders were not comfortable with him being in the race,” said a source close to the lenders. 

On March 25, Goyal, and his wife Anita Goyal, were forced to step down from board after the company had defaulted on payments. The lenders had also converted a substantial part of his pledged shares into equity.

At the time Goyal had said that he agreed to sacrifice his control and interest in the airline with the sole aim of ensuring the Jet family’s lasting welfare. His exit was seen as a welcome move by lenders, as it paved the way for bringing in a new investor to revive the ailing airline.

Goyal then made an attempt to come back through the bidding process, initiated by the lenders to find a new investor. “Some of the other bidders such as Etihad were not comfortable with Goyal in the fray,” said another source. Goyal’s exit is a relief for the lenders, who can now look for a serious investor, the source added.

Poor outlook

 Meanwhile, the crisis at Jet Airways showed no signs of abating on Tuesday, with the lenders refusing to release any interim funding unless the company offered some form of security. 

On the BSE, Jet Airways stocks crashed 7.6 per cent to close at ₹241 per share on Tuesday. But experts said that the airline may not survive, even if fresh funds are made available. 

The airline’s operations are down to just seven aircraft now. 

All the international routes have been cancelled, and nearly 350 pilots have already quit. “Those who understand the economics of air transport know that Jet Airways in its present avatar  cannot survive, even if funded. India’s Aviation Policy, regulatory and tax scenarios make the airline business challenging logistically and economically,” Shakti Lumba said in a tweet. 

Lumba, a former pilot, was instrumental in setting up IndiGo's operations in 2005. He also headed national carrier Air India's regional arm, Alliance Air.

Jitender Bhargava, Former Executive Director, Air India, said on Twitter: “The biggest threat to the economic viability of airlines is the quest of some airlines for garnering market share at the expense of profitability. With huge orders for aircraft placed by LCCs (low-cost carriers), which manage to recover costs, the situation is unlikely to improve for FSCs (full-service carriers).”

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