With the Tata Group reportedly entering into second phase of negotiations with debt-laden Jet Airways to acquire a majority stake in the latter, Jet’s stock soared 9.47 per cent on Monday to close at ₹250.75 apiece.
Amid rising fuel prices and depreciating rupee, the Naresh Goyal-promoted carrier has been struggling with its financials, and delayed salary payments to pilots and senior staff.
To generate more liquidity, the company also stopped free meals served to economy class passengers. However, when BusinessLine reached out to Jet Airways about the Tata Group coming to its rescue, the airline said, “The information... is totally speculative.”
According to reports, if the deal goes through, Tata Group plans to merge Vistara and Jet Airways.
Tata eyes Etihad too
Besides buying Jet promoter’s stake, the Tata Group is also looking to buy stake from Etihad Airways. Currently, Etihad Airways owns 24 per cent stake in Jet Airways.
Last month in a bid to rescue Jet Airways, Etihad had proposed a $35-million cash pre-purchase payment to JPPL (Jet Privilege Pvt Ltd). According to the report, Tata Group is keen to acquire JPPL as well. However, spokespersons from JPPL and Etihad Airways remained unavailable to comment on the same.
Jet Airways posted a consolidated net loss of ₹1,326 crore in the first quarter ended June 30 (against a net profit of ₹58 crore in the year-ago quarter) on an operating income of ₹6,257 crore.
As at June-end this year, the airline had a fleet size of 120 (113 as at June-end 2017). Aircraft utilisation (hours/day) improved to 13 hours from 12.5 hours.
Vistara to spread wings
Meanwhile, Vistara, a Tata Group-Singapore International Airlines joint venture, which commenced its operations in India over three years ago, is now preparing to fly overseas. The airline has a fleet of 22 planes.
Last month, Vistara received funds aggregating ₹2,000 crore from Tata Sons and Singapore Airlines.
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