As Jet Airways undergoes bankrupcty resolution, the Tata Group is looking to bid for the airline's aircraft and bilateral rights to scale up and tap the gap created by the exit of the Naresh-Goyal led airline.
The Tata Group has two joint ventures in the aviation space. One is with budget airline AirAsia and the other is its stake in full-service carrier Vistara, a joint venture with Singapore Airlines. Both Vistara and AirAsia India, along with their partners, are quietly putting together an aggressive plan to become a formidable force in the skies. AirAsia India plans to double their fleet from 21 to 40 aircraft by April next year and also plans to start international operations to Sri Lanka, Thailand and Malaysia by September 2019.
Vistara recently got permission to fly abroad after a delay of over a year due to the investigation in the alleged bribing and lobbying charges against AirAsia India. To back their plans, the Tatas, according to sources, have lined up Rs 4,500 crore for the two airlines. If everything goes to plan, they would be the only player in India to straddle both the low-cost carrier as well as the full-scale service space in the international arena among private players, Business Standard reported earlier.
According to a report in Economic Times, Vistara has sought to get more aircraft into its fleet, including those grounded at present. “Acquiring (Jet’s) Boeings makes our otherwise A320 Airbus fleet asymmetric but it will at least service the gap even if temporarily.” Tata SIA Airlines chairman Bhaskar Bhat was quoted as saying by ET. Clearly, with Jet Airways out of the picture, the airline is finally ready for take off with a new international flight plan.
With Jet out of the picture, Vistara is well placed to fill in the void in the European market as Air India is embroiled in its own financial problems and therefore not looking at expansion.
And if it decides to fly long-haul to the US, it would only have Air India to contend with. ( Read more about it here)
Last week, a SBI insolvency plea was admitted by the NCLT to take Jet under the resolution process. Besides the lenders, the airline is estimated to have a total liability of about Rs 25,000 crore which includes dues of operational creditors. Running out of cash, Jet Airways had suspended its entire operations on April 17. Subsequently, the government re-allocated the airline's slots and foreign traffic rights to rival carriers.
Currently, Jet has 14 wide-bodied aircraft, down from its peak of 124 planes. Jet also had 750 arrival departure slots from airports, of which 500 have been given away to rivals temporarily till December end. A new investor will get back the slots if it can get Jet flying again.