FinanceDraft

Jet Airways Revival Seems Highly Unlikely

The Indian government is losing all hopes of a likely revival of the nose deep in debt of Jet Airways. As per two senior officials working in the ministry of finance, the government has no hope that there will be a bidder for the airlines. Meanwhile, thousands of employees are pleading the Modi government to rescue the company. The company’s pilots union has also requested the government to help revive the company. The union has urged the government to stop the deregistration and also increase the speed of the bidding process. The government is under great pressure to bail out Jet as there is a rise in unemployment and the opposition is criticizing the Modi government for not doing enough to increase employment. But despite that, the government is shy of a bailout as there are other private companies like Videocon which is also in a similar condition and bailing out Jet would put tremendous strain on the government’s finance to rescue the other companies too.

Jet Airways stopped its flights from operating on April 17 after many lenders refused to give them more money to run its operations. Jet has above 120 aircraft, and more than 16000 employees and half of the flights have been deregistered, and many of its pilots and other staff have been poached by its lessors and so are the aircraft.

No party interested in buying

The State Bank of India had expected the bidding would be submitted by April end and the sale would happen in May, but there are no bidders as of now. Initially when the Jet Airways was up for bidding there were a few parties that were interested to buy it, but the massive debt of Rs 120 crore has become a huge deterrent, and thus there has been no solid bids to buy it, and that has increased the chances of the company facing bankruptcy. As per a senior official, the banks have been asked to wait for the results of the upcoming general elections in India. The official said, “The banks have been advised to wait for the formation of the next government … before taking any decision on Jet’s fate.”

The only bright side in this affair is that the bankruptcy proceedings may not happen immediately as an official said, “Jet’s borrowings are small compared to those of other big defaulters such as Videocon and some steel companies, so lenders likely can wait for some more time before commencing bankruptcy proceedings.”

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