Jet will re-emerge as a robust airline: Goyal, Etihad CEO in joint message

An airline source pointed out there is anxiousness among employees and stakeholders are awaiting an outcome

Jet Airways and Etihad Airways are working together on a resolution plan to make the airline robust and viable, the two airlines said in a joint statement on Monday. 

The communication comes in the backdrop of lessor actions to ground planes and threats from a section of pilots to stop flying over salary delays. 

“Jet Airways, its principal shareholders, including Etihad Airways, and key financial stakeholders are working towards the finalisation and subsequent implementation of the bank-led provisional resolution plan (BLPRP) to ensure the carrier emerges as a financially strong and resilient airline. The approval of the BLPRP by the board of directors of Jet Airways last week was an important step in this direction,” Jet Airways Chairman Naresh Goyal and Etihad’s Chief Executive Officer Tony Douglas said in a joint statement.

“We are confident that once the BLPRP is finalised and implemented, Jet Airways will re-emerge as a viable and robust airline to reclaim its rightful place as the airline of first choice for its customers,” it said.

The statement comes four days after the extraordinary general meeting to approve the increase in authorised share capital and conversion of debt into equity. While Goyal skipped the meeting, Etihad abstained from voting on the resolution. Etihad, which owns 24 per cent in the airline, is also laying stiff conditions to infuse fresh capital. The Abu Dhabi-based airline had earlier demanded stripping Goyal of all his powers and also wants a right of first refusal and waiver from the open offer.

Jet Airways faces a cash crunch leading to defaults in lease and loan payments. On Saturday, the airline informed the stock exchange that lessors had forced the grounding of two additional aircraft. The airline is also negotiating the early return of some of its leased planes because of fund shortage. Meanwhile pilots are also getting impatient over salary delay. While the National Aviators Guild - the pilots union - has warned of non-cooperation, a section of pilots from Delhi are threatening to stop work from March 1.

An airline source pointed out there is anxiousness among employees and stakeholders and everyone is awaiting an outcome. The joint statement is probably intended to convince them to remain patient, he said. Also, it is being seen as a tactic to discourage pilots from taking any drastic step.

The joint statement further said that Jet, which set a gold standard for service, has been hit by “extraordinary headwinds and challenges” like a weak rupee, rise in crude oil price, among others. 

“Some airlines have been hit harder than others. Jet Airways, India’s premier full-service airline, being one of them. Nevertheless, despite these challenges and higher costs of running a full-service airline in this environment, the airline’s staff has worked tirelessly with sincerity and commitment to continue serving their loyal guests,” the joint statement said, while highlighting achievements like increase in load factor, improved time performance, and lowest cancellation rate in December, among others.