Jet Airways Shares Decline Nearly 7% As Crisis Deepens
Shares of the Mumbai-based airline operator - Jet Airways Ltd dropped nearly 7 per cent to Rs 213.35 on the National Stock Exchange as the company's distress aggravated after the government called for an emergency meeting to discuss the cash-strapped carrier's woes. On the BSE, the stock declined 6.59 per cent to Rs 213.95. The government has asked state-run banks to rescue the airline without pushing it into bankruptcy, news agency Reuters reported citing two people within the administration.
State-run banks have been urged to convert debt into equity and take a stake in Jet in a rare move to use taxpayer money to save a struggling private-sector company from bankruptcy. The two people and another source, however, said this would be "transitory" and lenders could sell the stakes once Jet revives itself, the Reuters report added.
The 25-year-old airline defaulted on loans after racking up over $1 billion in debt, and owes money to banks, suppliers, pilots and lessors - some of whom have started terminating their lease deals with the carrier.
Meanwhile, Jet Airways' pilots have threatened to stop flying from April 1 if the cash-strapped airline does not have a rescue plan in place by March 31, a trade union said on Tuesday.
The airline's pilots union has also said that it seeks a proper roadmap from the airline by March 31 on paying their overdue salaries.
"We have decided that either the management lets us know about the progress of the resolution plan and the future of the company by March 31 or we will refrain from flying duties," said NAG (National Aviators Guild) Vice President, Captain Asim Valiani.
Jet now operates only 41 aircraft, aviation regulator Directorate General of Civil Aviation has said. Several passengers have been affected due to the grounding of Jet flights.
Shares of Jet Airways have so far this year declined 23 per cent underperforming the Nifty which has advanced 6.34 per cent since the start of this year.
(With inputs from Reuters)
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