Naresh Goyal, wife deboard Jet; lenders take control

Naresh Goyal, wife deboard Jet; lenders take cockpit control

Giving up chairmanship after more than 26 years, embattled Jet Airways’ founder Naresh Goyal on Monday quit as a board member, with the lenders taking control of the cockpit and deciding to infuse Rs 1,500 crore immediately into the ailing airline.

Struggling to stay afloat amid a debt burden of over Rs 8,000 crore, the board of the country’s first private full service carrier also approved conversion of banks’ debt into equity and induction of nominee directors of the lenders, who would become majority stakeholders.

Image result for Naresh Goyal,

Expressing happiness over the lenders’ decision, Finance Minister Arun Jaitley said India needs more airlines, “otherwise airfares would rise”.

“Banks have kept self interest in mind by trying to keep it as a going entity so that they can recover their dues,” he said in Delhi hours after the airline’s board cleared the debt resolution plan.

Bringing an end to weeks of uncertainty over the future of the cash-strapped carrier, the board has approved immediate fund infusion of up to Rs 1,500 crore by lenders as well as conversion of debt into equity.

Naresh Goyal, his wife Anita Goyal and Etihad Airways’ nominee director Kevin Knight have quit the board.

Gulf carrier Etihad, a strategic partner, holds 24 per cent stake in Jet Airways while Naresh Goyal has a shareholding of 51 per cent.

Goyal’s stake would come down to 25 per cent while that of Etihad would reduce to 12 per cent. The consortium of Indian lenders, led by State Bank of India (SBI), would become the majority shareholders of Jet Airways, the airline said in a statement.

The airline said two nominees of the promoter and one nominee of Etihad Airways would continue on the board, which would also see induction of two people nominated by the lenders.

SBI Chairman Rajnish Kumar said Naresh Goyal would be eligible to bid for the airline when the lenders auction it next month.

The board approved conversion of “Re 1 of lenders’ debt into equity by the issuance of 11.4 crore equity shares”, in accordance with RBI circular issued on February 12, 2018.

As per that circular, lenders have to start resolution process under the insolvency law if a borrower fails to repay in 180 days after the first default.

Shares of Jet Airways, which has been operating for over 25 years, zoomed 15.5 per cent on Monday after reports of Naresh Goyal’s exit poured in. The official announcement about the revamp came soon after the markets closed.

“The company will also engage with payment intermediaries for release of trapped cash. The airline will leverage the funding to partly clear pending dues towards lessors, vendors, creditors and employees in a phased manner.

“The move will see Jet Airways re-deploy several of its grounded aircraft back into its network, helping renew many of the routes it had temporarily suspended, which will help restore normalcy of operations,” it noted.

Financial crunch has forced the airline to ground more than 80 of its total 119 planes. At least 54 aircraft have been grounded due to non-payment of lease rentals.

An Interim Management Committee (IMC) has been constituted to oversee the overall financial and operational performance of the airline. The panel would be  under the overall supervision of the board of directors with the support of McKinsey & Co.

“As part of the resolution plan, the lenders will also begin the process of sale/issue of shares to new investors which is expected to be completed in the June quarter,” the statement said.

Naresh Goyal, who became chairman of the company in April 1992, said no sacrifice is too big for him to safeguard the interest of the airline and the families of its 22,000 employees. In a letter to employees, Goyal said the decision to step down from the board is not the end of the journey but the start of a brand new chapter.

Approval of the debt-recast plan will put the carrier on a “sounder and sustainable” financial footing, he said.

Against the backdrop of salary payments being delayed, the airline said the promoter and all stakeholders “remain fully committed to ensure deferred salaries and dues to external vendors and aircraft lessors are cleared on priority in the foreseeable future”.

SpiceJet Chairman and Managing Director Ajay Singh said, “Today is indeed a sad day for Indian aviation”.

 “By launching a truly world class airline, Naresh and Anita Goyal made India proud. This is also a wake-up call for Indian policy makers. We urgently need to address structural challenges that make India’s airlines uncompetitive to airlines around the world,” Singh said

According to Jet Airways, the board unanimously and unequivocally lauded Goyal’s vision in giving birth to the iconic brand and also averred that he has always been way ahead of the times. The board also appreciated Goyal’s sterling role in IATA, resulting in the innumerable airline codeshare partnerships he built for the airline.

The International Air Transport Association (IATA) is a grouping of around 290 airlines, including Jet Airways.

“The board also took particular and deeply grateful cognisance of the Chairman’s noble, large-hearted self-sacrifice in graciously stepping down from all that he held dear for the sake of the 22,000 employees of the company,” the statement said.

-PTI | 26 March 2019 | Mumbai/New Delhi

Boeing 737 Max 8 aircraft operating in India grounded

All Boeing 737 Max 8 aircraft operating in India grounded today: DGCA

All Boeing 737 Max 8 aircraft operating in the country would be grounded by 4 p.m. on Wednesday as per the decision taken by the Directorate General of Civil Aviation (DGCA) on Tuesday night, a senior official of the aviation watchdog told PTI.

The decision comes days after a 737 MAX 8 aircraft of the Ethiopian Airlines crashed near Addis Ababa, killing 157 people, including four Indians. SpiceJet has around 12 such aircraft in its fleet. Jet Airways five, which have been grounded already.

A Jet Airways Boeing 737 on the tarmac at Rajiv Gandhi International Airport in Hyderabad. File photo

In a statement on Wednesday, SpiceJet said,” SpiceJet has suspended Boeing 737 Max operations following the DGCA’s decision to ground the aircraft. Safety and security of our passengers, crew and operations are of utmost importance to us and we will be working with the regulator and the manufacturer to attain normalcy in our operations. We are confident of accommodating the vast majority of our passengers and minimise inconvenience.”

The decision comes days after a 737 MAX 8 aircraft of the Ethiopian Airlines crashed near Addis Ababa, killing 157 people, including four Indians. SpiceJet has around 12 such aircraft in its fleet. Jet Airways five, which have been grounded already. In a statement on Wednesday, SpiceJet said,” SpiceJet has suspended Boeing 737 Max operations following the DGCA’s decision to ground the aircraft. Safety and security of our passengers, crew and operations are of utmost importance to us and we will be working with the regulator and the manufacturer to attain normalcy in our operations. We are confident of accommodating the vast majority of our passengers and minimise inconvenience.”

Second such crash

The Ethiopian Airlines incident on Sunday was the second such crash involving a Boeing 737 MAX 8 aircraft in less than five months. In October last, an aircraft operated by Lion Air crashed, killing over 180 people in Indonesia.

The European Union and many other countries across the world have already banned the use of the 737 Max 8 aircraft in their respective airspace.

-PTI, NEW DELHI , MARCH 13, 2019

Jet Airways tops global airline product rating chart

Jet Airways tops global airline product rating chart, Air India a close second

Indigo, SpiceJet lead among low-cost carriers in Airline Ratings ranking for 2018

The airline safety and product ratings for 2018 by global airline safety and product rating agency has Jet Airways topping the ‘product’ category list with a score of 7/7 in the full-service carrier category. Indigo has scored 4 in the low-cost airline category.

In the ratings announced this week, Air India has scored five, while Air Asia India has got a rating of 2 on 5. An airline is rated from 1 to 7 stars on product category, with seven being the highest ranking for full service carriers, while the low-cost ones are rated out of 5.

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Vistara Airlines is the only Indian carrier not rated

While Indigo and SpiceJet have managed a product rating of 4 each out of 5, Air India and GoAir have got 5 on 7 and 3.5 on 5 respectively. Vistara Airlines is the only Indian carrier not rated.

Ranking criteria

The criteria for product ratings include personal in-flight entertainment, cabin space and comfort, beverages, food, seat recline, website information, etc.

In the ‘safety’ category, Air India, Go Air, Indigo, Jet Airways and Jet Konnect have all managed a rating of 6 on 7. Air Asia India and SpiceJet have got 3 on 7 each, while Air India Express, the only Indian carrier without a fatality-free record — due to the 2010 Mangalore air crash — has got a rating of 5.

“The product is core to our business and a competitive differentiator across the industry. The quality of the experience determines whether guests travel with us or another airline. As a result, we are constantly innovating to ensure that we remain the gold standard of product excellence in the aviation industry,” a Jet Airways spokesperson said.

AirlineRatings, launched in June 2013, rates the safety and in-flight product of 405 airlines. It has been used by passengers from 232 countries and has become the industry standard for safety and product rating.


For Air India there are no takers on deadline eve

For Air India there are no takers on deadline eve;  govt hopes against hope

No bids have been received so far for Air India stake, the Government said on Wednesday even as it hoped of getting a good response on the last day of the formal bidding process on Thursday.

“We expect good response before bid closes tomorrow,” Civil Aviation Secretary RN Choubey told PTI responding to a query.

For Air IndiaEarlier in the day, he said no bids have been received for the stake sale so far. The deadline for the expression of interest ends on Thursday and the request for proposal could be issued only after June 15.

On May 23, Choubey had said the highest bidder for the airline would be known by August-end. But, the highest bidder might not be the successful bidder, he said, adding the Government intends to complete the disinvestment by year-end.

Significantly, he had said the Government could decide against selling State-run Air India if it does not get “adequate” price for it.

“The Government has the right to sell or not to sell Air India if the bid price is found to be inadequate,” Choubey had told reporters.

“Though the transaction adviser (EY) will assess the enterprise value, the right price for the airline will be decided by us,” he said.

Asked about AI employees’ union protests against the proposed sale, he said they were conscious of the fact that airlines would do well after privatisation.

The Government had on March 28 unveiled plans to sell up to a 76 per cent stake in the loss-making carrier, and transfer the management control to private players.

The profitable Air India Express and the joint venture AISATS — an equal joint venture between the national carrier and the Singapore-based SATS Ltd —will also be a part of the disinvestment process.

The ailing airline’s total debt stood at Rs 48,781 crore at the end of March 2017.

-PTI | 31 May 2018 | New Delhi

After Ratan Tata, AirAsia chief Tony Fernandes attacks older airlines over 5/20 rule

After Ratan Tata, AirAsia chief Tony Fernandes attacks older airlines over 5/20 rule

 The war of words over 5/20 norm continues with AirAsia chief Tony Fernandes on Saturday After Ratan Tata, AirAsia chief joins fight over 5/20 norm asking whether all of them live in India, in an obvious reference to Jet Airways chairman Naresh Goyal, an NRI living in the UK.

Goyal’s airline along with three budget carriers – IndiGo, SpiceJet and GoAir – are opposed to change in the existing regulation, popularly known as ‘5/20 norm’ for international flying by domestic carriers, which the government is mulling as part of its proposed new civil aviation policy.

AirAsia India and Vistara – two airlines operated by the Tatas through joint ventures – are presently ineligible to operate overseas as the 5/20 norm requires an Indian carrier to have minimum five years domestic operational experience and at least 20 planes to go international.

“Reading all the stuff on TATA and Airasia. Quite crazy 5/20 hasn’t been solved. Are owners of Indian airlines living in India. Naresh? NRI,” Fernandes said in a series of tweets.

Tata Sons runs joint venture airlines, Vistara and AirAsia India, with Singapore Airlines and AirAsia respectively. Arun Bhatia of Telestra Tradeplace is the third partner in AirAsia India.

Terming as sad the lobbying of incumbent airlines for “protection and preferential treatment”, Chairman Emeritus of Tata Sons, Ratan Tata had last Sunday said such moves (for continuation of 5/20 norm) are reminiscent of the monopolistic pressures by entities with vested interests who fear competition.

The incumbent carriers under the banner of Federation of Indian Airlines (FIA) too hit back at Tata and the subsequent statement from Tata Sons alleging that the demand to call for removal of 5/20 was not in “national interest” but “self-interest” on the part of the Tata Sons and its partner airlines.

“People of India your voice needs to be heard more. For too long airlines have been controlled by a few. Mostly NRI. Competition is needed,” Fernandes, whose airline AirAsia holds 49 per cent in AirAsia India, said in another tweet.

“Indians need more tourism. More jobs. Only country in the world with a 5/20 rule. Malaysia has foreign airlines operating here. No issue,” he further tweeted.

Under the current FDI regulations, foreign airlines can own up to 49 per cent in domestic carriers while an NRI is allowed to hold 100 per cent in an airline.

However, FIA alleges that AirAsia India and Vistara were being controlled by their overseas stakeholders – Air Asia Bhd and Singapore Airlines, respectively, a charge which Tata Sons has denied.

Tata Sons claim that that the majority ownership and effective control of both airlines are with the Indian parties as per the government’s requirement.

Responding to allegations of older airlines that Indian carriers can’t set up an airline company in Malaysia, Fernandes tweeted, “Can’t see why not. There is an Indonesian airline operating a MALAYSIAN aoc (air operator certificate).”

Along with finalising the new civil aviation policy, which is in the advanced stage, the government also has to decide the fate of 5/20 norm.
-PTI | Feb 27, 2016,New Delhi

SpiceJet announces Republic Day sale

SpiceJet announces Republic Day sale

w cost carrier SpiceJet on Monday announced its Republic Day sale on air tickets on domestic and international routes.

The airline said that under the sale, the domestic sector one way base fare would start at Rs 826 (plus applicable taxes) and international sector one way base fare at Rs 3026 (plus applicable taxes).

The discount offer is applicable on select flights across SpiceJet’s network (both domestic and international).

The three-day sale will be open for booking till midnight, 27 January, 2016, for travel between 01 February and 12 April, 2016. The offer is available on first-come-first-served basis, and seats per flight are limited, said a Spice Jet release.
Tickets under this offer are non-refundable (statutory taxes are refundable) though they are changeable with a change in fee and payment of the fare difference. Discount offers are not applicable on group bookings and infant bookings. Blackout dates are applicable.

Tickets for this sale can be booked on, SpiceJet’s official mobile app (iOS and Android), on online travel portals, through travel agents and all other channels.
 Flight schedule and timings are subject to regulatory approvals.
-Tickets can be booked on
-TNN | Jan 25, 2016

Air passenger traffic higher by 20 percent in 2015

Air passenger traffic higher by 20 percent in 2015

Low fuel prices, coupled with competitive fares and recovering economic activity, led India’s domestic air passenger traffic to skyrocket by 20.34 percent in 2015, official data showed on Monday.

The data furnished by the Directorate General of Civil Aviation (DGCA) showed that passenger traffic during the January-December period stood at 811 lakh in 2015 from 674 lakh passengers, who were ferried during 2014.

“Passengers carried by domestic airlines during January-December 2015 were 810.91 lakh
as against 673.83 lakh during the corresponding period of previous year, thereby
registering a growth of 20.34 percent,” the DGCA said in its monthly statistical supplement.

The data showed that low cost carrier (LCC) IndiGo achieved the highest market share in the calendar year under review at 36.7 percent followed by Jet Airways (19.2), Air India (16.4), SpiceJet (11.6), Go Air (8.5) and JetLite (3.3 percent).

Others like AirAsia India had a market penetration of 1.7 percent, while Vistara reported a market share of 1.3 percent, followed by Air Costa’s (0.9). Air Pegasus and Trujet had a market share — (0.1), respectively.

On a monthly-basis, the air passenger traffic rose by 19.71 percent in December to 77.09 lakh from 64.40 lakh registered during the corresponding month of last year.

Furthermore, the DGCA data revealed that LCC SpiceJet had the highest passenger load factor during the month under review at 92.1 percent.

The LCC was followed by another budget carrier IndiGo (88.5), Air Costa (87.1), Air India (86.7), Go Air (86.5), Jet Airways (83.8), JetLite (83), AirAsia India (82.7), Trujet (82.7), Air Pegasus (82.2) and Vistara (77.6).

At the same time, data on the on-time performance showed Vistara leading the industry with 90.6 percent punctuality at four major airports of Bengaluru, Delhi, Hyderabad and Mumbai.

It was followed by Jet Airways and JetLite (78.5), IndiGo (78.3), SpiceJet (72.9) and Air India (62.8 percent).

Meanwhile, Air Pegasus had the highest numbers of cancellations at 19.33 percent followed by Air Costa (14.59), Jet Airways (4.14), Air India (2.39), IndiGo (2.01), Go Air (1.52), Trujet (1.26), JetLite (0.88), AirAsia India (0.49), Vistara (0.43) and SpiceJet (0.34 percent).

“The overall cancellation rate of scheduled domestic airlines for the month of
December 2015 has been 2.49 percent,” the aviation regulator said.

According to the data, a total of 1,091 passenger-related complaints were received during December.

“During December 2015, a total of 1,091 passenger-related complaints had been
received by the scheduled domestic airlines,” the statement disclosed.

“The number of complaints per 10,000 passengers carried for the month of December 2015 has been 1.4”

Air India had the highest complaints rate per 10,000 passengers in the month under review — (4.3).

The national passenger carrier was followed by Go Air (1.5), Jet Airways and JetLite (1.3), Air Costa at (1.1), Air Pegasus (1.00), AirAsia India (0.7), SpcieJet (0.6) IndiGo (0.5), Trujet (0.4) and Vistara (0.1).

-18 January 2016 | IANS | New Delhi

IndiGo eyes up to $510 million in India’s biggest IPO in three years – sources

IndiGo eyes up to $510 million in India’s biggest IPO in three years – sources

The operator of top Indian airline IndiGo is looking to raise up to $510 million in its initial public offering (IPO), according to sources, betting on an improved financial outlook helped by lower oil prices and surging passenger growth.

That figure is higher than previously expected; bankers said in the summer that the company was expected to raise up to $400 million, but its valuations have since been bolstered after it reported a big rise in annual profits.

InterGlobe Aviation Ltd, which operates the low-cost airline, has set the indicative price band for the IPO at between 700 and 765 rupees per share, according to the three sources directly involved in the process.

At the top end of the price band, the airline would raise as much as $510 million, making it the largest IPO in the Indian market since 2012, and giving the company a market value of about $4.2 billion, said the sources.

The sources did not want to be named ahead of a public announcement. A spokeswoman for IndiGo did not respond to a request for comment.

IndiGo, whose rivals in the Indian aviation market include Jet Airways and SpiceJet, has been the only consistently profitable airline in the country for the last seven years, according to consultancy Centre for Aviation.

Its share sale, set to be the first airline listing in nine years, will open on Oct. 27. The company plans to use the proceeds to pay off some outstanding aircraft leasing liabilities and to expand its business.

Some investors, however, said the pricing was on the high side. “Even though IndiGo is doing well and it is the country’s most profitable airline, the pricing for this issue is a bit aggressive,” said Neeraj Dewan, director at brokerage Quantum Securities.

The IPO is set to be the biggest airline public issue in India since low-cost carrier Deccan Aviation’s market debut in 2006. It will also be the second high-profile public offering this month, triggering hopes of a revival in India’s sluggish capital market activity.

Coffee Day Enterprises Ltd, India’s biggest coffee chain operator, was oversubscribed for its up to $177 million IPO which closed on Friday.

IndiGo’s book for cornerstone investors – guaranteed a major share of the offering regardless of the final price – will open on Oct. 26. The IPO will close on Oct. 29 for all investors, according to the company’s prospectus.

($1 = 64.7050 Indian rupees)

(Editing by Pravin Char)

-Reuters, By Sumeet Chatterjee