Debt-laden private airlines Jet Airways is in talks with Abu Dhabi-based Etihad Airways on a rescue plan, as reported by Reuters. Executives from Etihad and Jet Airways met some of the latter’s bankers in Mumbai in the recent past to discuss ways to address its cash flow issues and evaluate the carrier's future business plan, the sources said as quoted by the news agency. However, no deal has been finalised yet. Etihad had come to Jet’s rescue in 2013 as well by buying 24 per cent stakes in the carrier.
The Naresh Goyal-founded airlines is in a severe cash crunch and owes money to vendors and lessors. It has also not been able to pay salaries to its pilots, senior executives resulting in the cancellation of flights. To reign in the crunch, Jet has cancelled flights on non-profitable routes and has also decided to do away with complimentary meals for economy class passengers travelling on domestic routes under two more fare categories. Following three consecutive quarterly losses, the full-service carrier has simplified its sub-fleet, reduced sales, distribution and maintenance cost.
Though India is one of the world’s fastest-growing airlines markets, Jet Airways has constantly faced the brunt of the falling rupee, rising jet fuel prices, intense price wars by low-cost carriers.
However, according to sources, Etihad might be wary of the rescue deal this time around as it has lost money in other airline ventures such as Alitalia and Air Berlin.
According to CNBC-TV18, Naresh Goyal has assured pilots that there will be no delays in the payment of salaries from April 1, 2019 onwards.
The airline is aiming to achieve cost savings of over Rs 2,000 crore over the next two years through strategic initiatives, chief executive officer Vinay Dube had said after the second quarter earnings.
Jet Airways has already realised cost savings of over Rs 500 crore during the first half of the fiscal owing to these cost-rationalisation measures, Dube had said.
Jet and Etihad did not immediately respond to emails seeking comment, Reuters said.