Sbi

iYes, we had a meeting with the Jet management where they have
sought liquidity support from us,” said one of the people cited above.
“They can be supported further but the final decision will depend upon
the plan they submit, whether there will be a stake sale or some strategic
partnership where some fund infusion will happen, that is not clear yet. I
would like to keep my money secure, further support will depend on
exclusive guarantees and right over some cash flows, that ring fencing is
very  .. a

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misery
The State Bank of India (SBI) has asked Jet Airways to provide
enough collateral for the emergency funding that the airline had
sought, The Economic Times reported on Aug. 13. The country’s
biggest lender has also asked it to disclose its cash flow position
towards this

“Given the continuous rise in crude oil prices, along with a

weakening rupee, the operating environment would continue to
remain challenging for the company
The latest move is a part of the airline’s effort to reduce high operational costs and
eliminate inefficiencies. The debt-laden airline, known for its premium services, has
completely revamped its strategy to lower operational costs.

Cut down foodHIGHLIGHTS

 Jet Airways will stop meals for all domestic flight passengers from January 1

 Trouble mounted for Jet Airways after it suffered three consecutive quarterly losses

 The airline has also let go of at least 36 employees in a bid to cut costs

India’s biggest full-service carrier Jet Airways, which is going through a massive financial
crunch, recently decided to stop free meals for most of its domestic economy class passengers
from January, reported Reuters.
With the fresh decision, Jet Airways will now offer free meals in economy class bookings to
JetPrivilege (JP) members only.
The latest move is a part of the airline’s effort to reduce high operational costs and eliminate
inefficiencies. The debt-laden airline, known for its premium services, has completely
revamped its strategy to lower operational costs.
However, aviation industry experts conclude that the Naresh Goyal-promoted airline is far
from weathering the storm. Having said that, here are some important facts related to the
financial crisis at Jet Airways:
Three consecutive quarterly losses
The premium airline suffered three back-to-back quarterly losses starting from the January-
March quarter when it reported a massive loss of Rs 1,045 crore; then in the April-June
quarter when it reported a loss of Rs 1,323 crore.
However, trouble for the airline intensified in the July-September quarter when it
encountered a loss of Rs 1297.5 crore. At one point of time, it was reported that the airline
does not have the capital to operate beyond 60 days.
Aviation turbine fuel burden
The rising cost of aviation turbine fuel (ATF) took a heavy toll on many airlines, especially
Jet Airways as it flies on international routes as well. During the period from June to
September 2018, there was a significant spike in global oil prices, forcing airlines to increase
spending on ATF. However, that cost was not transferred to the passengers owing to the low-
cost model. This lead to a considerable increase in operational costs.
Low-cost model
The low-cost model, followed by most airlines (domestic) in India, is one of the biggest
factors behind rising operational costs in the aviation sector. Jet Airways is one of those
players which has been deeply hurt by the model followed by budget airlines such as IndiGo
and SpiceJet.
It involves offering heavy discounts on flight tickets to attract more passengers. In a nutshell,
it is a business strategy which is based on volume-based sales.
The model has turned the Indian aviation sector into a vulture’s nest, with each airline
looking to snatch customers away from competitors, even at the cost of offering tickets at dirt
cheap prices. Jet Airways also had to match the lower ticket prices to attract more customers.
Many experts including airline executives have critcised the low-cost model for being the
reason behind the slump in the airline industry, especially those airlines which operate on
international routes as well.
Reduced operations
Jet Airways is expected stop flight operations to Gulf routes due to its badly-hit finances.
Flight operations to Dubai, Abu Dhabi, Doha and Muscat including Doha-Kochi, Abu Dhabi-
Mangalore, Mangalore-Dubai, Delhi-Muscat and Abu-Dhabi-Lucknow will be affected.
The airline is expected to cancel at least 40 flights a week in nine Gulf country routes. The
airline may further streamline operations to boost operational profits.
Non-payment of staff salary
The airline has even failed to pay salary to several members of their staff, including senior
pilots and even external vendors. Just a couple of days ago, it had to cancel 14 flights in a
single day after some pilots called in sick over non-payment of remuneration.
While 14 pilots bailed on Sunday (December 02), chances of the incident repeating itself are
high considering that Jet Airways earlier committed to clear pending dues by March 31,
2019.
Jet Airways has also let go of at least 36 employees in a bid to cut costs.
Hunting for a solution
Entrepreneur Naresh Goyal is trying to rope in Etihad Airways, which owns 24 per cent stake
in Jet Airways, to buy more shares in the company and offer some relief.

osses have been mounting and the debt on its books, although reduced, is
still quite high.

The August salary for pilots and engineers came in dribs and drabs and 25
per cent of the September salary came on October 27.

The senior management team hasn't been fully paid either, dues are piling
up and a handful of executives have quit.

Jet Airways has been through several ups and downs in its 25 year history
but never have things looked as grim as now.

Jet Airways took to the skies in 1993.

Promoter Naresh Goyal who rose from nothing and nowhere offered an
impeccable service.

Jet in fact played a bigger role than anyone in the country envisaged or
appreciated: Several corporate deals back then were struck quite literally in
the air as the who's who of India rubbed shoulders in Jet's club class.

A past master at managing the environment and keeping competition at

bay, Goyal was single-handedly credited with preventing Tata group’s entry
(ironically, there's talk of him selling to them now) into the Indian air space
in 1996 in partnership with Singapore Airlines.

He was equally successful at swatting various smaller flies that tried to

make a dent in his domain.

The airline had an unblemished record till 2003.

It was the launch of the erstwhile Air Deccan in 2003-04 followed by the
entry of a slew of low-fare airlines in the Indian airspace that was Jet’s
undoing.

Competition began to chip at Jet's edges and the Indian flying public got its
first taste of blood.

Fares began to head south and value conscious Indians began to flock to
low-fare alternatives.

Seeing the writing on the domestic wall, Jet started its first long-haul flight
to London in 2005, foraying into international territory, a step that led to
further bleeding on its books.

But Goyal remained paranoid about competition.

Perhaps the biggest nail in Jet's coffin was when Goyal decided to buy out
Air Sahara in 2007, a deal his then closest aide Saroj Datta strongly advised
him against.

Datta -- who is no more -- largely felt that Air Sahara was not worth the
money Goyal had agreed to pay and in fact tried his best to dissuade Goyal
even at the cost of reneging on his word.

Goyal tried to wriggle himself out of it but eventually it was Subroto Roy --
Sahara’s founder -- who had the last laugh.
Goyal's paranoia about competition often led him into bizarre situations.

I remember watching him smiling beatifically into the camera, arms around
arch-rival Vijay Mallya in a golf cart at an aviation event in Hyderabad back
in 2007-08.

The duo worked on several hare-brained alliances to unite against low-cost

carriers.

One would have thought Goyal’s fortunes would improve after Kingfisher
made its own set of follies and folded up in 2012-13.

Unfortunately for him by then the Indian airspace was quite a different
animal and was largely out of his grasp.

In addition, his past mistakes had caught up with him and the price of
those had to be paid.

For the last several years, Jet Airways has been trying to restructure with no
success.

Off and on when the airline would be on the brink of closure, Goyal would
tap his rich friends in Mumbai to bail him out.

Funds would trickle in fits and starts.

In 2013, Goyal managed to sell 24 per cent stake to Etihad for a price of
$379 million, which is more than the airline's total market capitalisation
today.

For the first time in decades, Goyal seems to be in an irretrievable corner.

Unless he pulls the proverbial rabbit out of his hat or reveals an unexpected
ace of spades, the airline he built from scratch -- many refer to it as “his
baby” -- may slip out of his grasp.

Those close to Goyal from the start are convinced that Jet can manage
without him, but they aren’t sure it’s vice versa.