Share Market of Jet Airways Collapse
Mumbai, India– Jet Airways’, India’s once largest private airline, share market dropped 34 percent on Thursday. Investors are now doubtful for its revival. However, lenders to the carrier are still confident in the success of the bidding process for the grounded Indian airline.
On Wednesday, the lenders led by State Bank of India denied an extension of more funds for its operation. As a result, the company has to stop all evening flight operations.
Jet Airways is stuck with bank debt of approximately $1.2 billion. Aside from that, the carrier is faltering because they were not able to receive a stop-gap loan worth around $217 million from its lenders. This loan is part of the rescue deal they agreed upon last March.
Shukor Yusof, head of the aviation consultancy Endau Analytics, said, “Jet Airways’ value is dwindling with each passing day.” Investors even started to be skeptical about the whole success of the deal.
Jet Airways’ Peak
Before, the airline operates above 120 planes and more than 600 daily flights. Now with the absence of funds, the 16,000 employees of the Jet had to cancel hundreds of flights and halt all flights out of India.
According to the lenders, pointing to expressions of interest, “The best way forward for the survival of Jet Airways is to get binding bids from potential investors who have expressed EOI and have been issued bid documents on 16th April.”
Thrive for Success
Last Tuesday, CNBC-TV18 reported that the airline plans to send an invitation binding binds from four shortlisted suitors. These suitors include private equity firms like Indian wealth fund National Investment and Infrastructure Fund (NIIF), TPG Capital and Indigo Partners, and the Etihad Airways that owns some shares in Jet.
Jet Airways has been the biggest flight operator in Mumbai. Other airlines, like SpiceJet Ltd and IndiGo, find Jet’s dilemma as an opportunity to fill a gap in stocks.
The meeting between airports and airlines is on Thursday, according to India’s Ministry of Aviation.