Exeiowa wrote:

Curios about line 2c) Employee Renumeration and Benefits

Is that a paper exspense (as in how much they cost this quater but does not include that money actually being paid out) or how much has gone out with a lot more to come when they get caught up.

How much they cost this quarter

Looks like banks other than SBI are not onboard with the draft resolution plan. Jet Airways will be a dead man walking for some more time
https://economictimes.indiatimes.com/ma ... 002375.cms

unrave wrote:

Looks like banks other than SBI are not onboard with the draft resolution plan. Jet Airways will be a dead man walking for some more time
https://economictimes.indiatimes.com/ma ... 002375.cms

That was yesterday's news! Today's news from the same newspaper tells a differ story per the link below:
https://economictimes.indiatimes.com/in ... 018038.cms

In short:
1) Goyal’s stake will drop to 20% from 51%, stripping him of board membership and management control. He will, however, retain his status as a promoter. [Does anyone know what "promoter" status signifies from a practical standpoint?

2) A consortium of banks, along with the National Investment and Infrastructure Fund (NIIF) and Etihad, will invest about Rs 3,400 crore in Jet Airways, leading to a much-reduced holding for founder Naresh Goyal, a change in management control and lenders with the biggest stake. Following the infusion, which will be in phases, the consortium of banks, led by State Bank of India, will own 32% of the airline and Abu Dhabi-owned Etihad and the NIIF will hold about 24.9% and 19.5%, respectively

3) “Both NIIF and Etihad funds will be converted into equity at a rate of Rs 150 per share”. The banks will get their stake in the company at Rs 1 per share.

BrooklyBOMgal wrote:

I know its going to cost a lot but I would like to see 9W replace their wide body fleets with newer planes. Most of their wide body fleet is over 10 years old, especially the 777s.

Their current hero, i.e. Delta Airlines, is known to operate aircraft beyond 30 yrs or so. One reason it has stellar credit ratings.

I think A330s should be replaced with 789s on lease-end. 9W owns 77Ws and no reason to replace them any time soon. Delta allowing 9W a rebranded Delta One product will be a game changer.

In short, can I breathe easy and book a 9W flight or two for 3 months down the line?

Yes / No ?

Yes, definitely yes.

vadodara wrote:

BrooklyBOMgal wrote:

I know its going to cost a lot but I would like to see 9W replace their wide body fleets with newer planes. Most of their wide body fleet is over 10 years old, especially the 777s.

Their current hero, i.e. Delta Airlines, is known to operate aircraft beyond 30 yrs or so. One reason it has stellar credit ratings.

I do wonder about 9W's fleet replacement strategy. With oil so low and stage lengths in India being quite short, how much benefit do they actually get relative to the cost of lease/aquisition?

This is independent of interior cabin age and condition. 9W's a332's are falling apart internally, but the airframe is perfectly fine for another decade or so.

Antarius wrote:

vadodara wrote:

BrooklyBOMgal wrote:

I know its going to cost a lot but I would like to see 9W replace their wide body fleets with newer planes. Most of their wide body fleet is over 10 years old, especially the 777s.

Their current hero, i.e. Delta Airlines, is known to operate aircraft beyond 30 yrs or so. One reason it has stellar credit ratings.

I do wonder about 9W's fleet replacement strategy. With oil so low and stage lengths in India being quite short, how much benefit do they actually get relative to the cost of lease/aquisition?

This is independent of interior cabin age and condition. 9W's a332's are falling apart internally, but the airframe is perfectly fine for another decade or so.

Recall the 30% tax on jet fuel at most Indian hubs (not HYD). That raises the cost of flying about a the lease payment.

For airlines outside of India, high utilization save about 6% of total cost, paid back a little over half that in increased lease payments. In India, the high fuel taxes result in a lower utilization being required for break even. For Indian airlines, the MAX should have a 4% or so higher profit margin.

Lightsaber

A quick explainer on where things stand at Jet Airways
https://www.bloomberg.com/news/articles ... xed-income

Spiderguy252 wrote:

In short, can I breathe easy and book a 9W flight or two for 3 months down the line?

Yes / No ?

That wins the award for the most pertinent question in the thread.

You win a cookie.

unrave wrote:

A quick explainer on where things stand at Jet Airways
https://www.bloomberg.com/news/articles ... xed-income

Bloomberg must be part of the Times group... oh wait

Antarius wrote:

Bloomberg must be part of the Times group... oh wait

It is a globally co-ordinated smear campaign against Jet Airways that has been instigated by IndiGo. Jet Airways is in the pink of its financial health and any report to the contrary is nothing but PR hatchet job. REEEEEEEE

Business Standard's editorial argues that the deal offered is too lenient on Naresh Goyal


My view is that while things have improved dramatically since the days of Kingfisher, public sector banks are still not ruthless enough in going after errant promoters.

There are reports that more planes have been grounded for a total of 9. Jet maintains only 5 have been grounded
https://www.livemint.com/companies/news ... 44153.html

Why is this still going on. They say there is deal, great. Release the money and move on. On the one hand the government is basically bailing Jet out (what ever we might think about that), so why not speed this up.

unrave wrote:

There are reports that more planes have been grounded for a total of 9. Jet maintains only 5 have been grounded
https://www.livemint.com/companies/news ... 44153.html

What is happening? Who is supplying the billions to provide a cushion to restructure.

I found another similar link. Leasing companies are wanting dues, not talk and are grounding unpaid aircraft:

https://mobile.reuters.com/article/amp/idUSKCN1QA12O

This has a risk of snowballing. We are at the end game. Now is when companies are rescued or fail. Nothing is instant, but if too many more aircraft are grounded, the snowball becomes the avalanche.

Lightsaber

Once fuel suppliers start only taking cash not credit the end is nigh.

News coming out this afternoon state Jet Airways shareholders agreed to swap company debt with shares ownership:

https://www.cnbcarabia.com/news/view/50 ... بأسهم.html

English translation should be something like this:

15:15 23-02-2019
Jet Airways Indian shareholders agree to swap debt equity


The Indian Jet Airways said its shareholders had agreed to a plan to convert existing debts into shares, paving the way for the company's lenders with problems to inject liquidity and nominate directors to the board.

Last week, Jet's board of directors approved a plan offered by lenders led by the State Bank of India to inject liquidity into stocks, restructure debts and sell or re-lease aircraft after they were sold.

The plan will mean that lenders will have a larger share than any other shareholder.

The Chairman of the board currently owns a 51% stake in the company, while Etihad Airways, headquartered in Abu Dhabi, has 24%.

According to the credit rating agency "Accra", Jet, whose net debt amounted to Rs. 72.99 billion, the equivalent of 1.03 billion dollars, at the end of December, had a debt payment to pay for next month. The company was unable to pay the pilots ' salaries, and invoices were due to the tenants.

Jet, India's largest full-service air carrier, suffers from low-cost airline competition, a depreciation of the rupee and rising oil prices. The share price was badly damaged in 2018, losing about 70% of its value.

In a disclosure to regulators, Jet said 98 percent of its shareholders voted in favor of increasing the equity to 22 billion rupees, equivalent to 309.8 million dollars, from two billion rupees during a special meeting.

Delhi based pilots threaten to stop flying if the dues are not cleared by 28FEB
https://www.financialexpress.com/indust ... s/1496689/

unrave wrote:

Delhi based pilots threaten to stop flying if the dues are not cleared by 28FEB
https://www.financialexpress.com/indust ... s/1496689/

There is no excuse for not paying workers. Since pilots cannot readily transfer jobs, their only course of action is to withhold labor. The prior promises haven't been met, so future promises must be discounted.

Whomever buys jet will see the first few billion disappear to pay past due bills. I hope everyone realizes they must be reformed (made more efficient) rapidly.

Lightsaber

There were quite a few media articles saying SBI was about to move the NCLT route to recover loans from jet . The airline's stocks fell 5% due to the same .
Today SBI confirmed that it was just a media speculation ! Yet another (failed) attempt by Indian media and lobbyists to damage the situation .

binayak wrote:

There were quite a few media articles saying SBI was about to move the NCLT route to recover loans from jet . The airline's stocks fell 5% due to the same .
Today SBI confirmed that it was just a media speculation ! Yet another (failed) attempt by Indian media and lobbyists to damage the situation .

That was a PTI feed published by everyone. You would think that PTI of all agencies would be more reliable than this

binayak wrote:

There were quite a few media articles saying SBI was about to move the NCLT route to recover loans from jet . The airline's stocks fell 5% due to the same .
Today SBI confirmed that it was just a media speculation ! Yet another (failed) attempt by Indian media and lobbyists to damage the situation .

I will say it again, I just don't get how the banks, the GOI or Jet thinks this is the best way to handle situations like this. There is no doubt in my mind that eh GOI does not want Jet to fail (and I think they are right by this). So given that, why not negotiate the settlement (since the GOI controls the banks) and roll out the solution asap. What is still going on behind the scenes that causes this to drag on and on. It is nothing short of a joke. To me this speaks volumes about the Indian business environment. So sloppy. On one hand you have the more of less efficient western capitalist economies like UK/US and then the ultra managed Chinese economy. I can't believe I am saying this, but I am starting to think that the Chinese system is probably more suited for India.

CaliguyNYC wrote:

...I can't believe I am saying this, but I am starting to think that the Chinese system is probably more suited for India.

China subsidizes aviation with pride to the extent of $1 Billion/year, not counting local subsidies.
India subsidizes aviation with a lot of guilt to the extent of $300 Million/year.

Back to Jet issue.
One thing Indian politicians are good at is plausible deniability, they want to be deeply involved in JetRescue but no one should be able to prove they were. All this drama is just to achieve that, made up due diligence.

CaliguyNYC wrote:

binayak wrote:

There were quite a few media articles saying SBI was about to move the NCLT route to recover loans from jet . The airline's stocks fell 5% due to the same .
Today SBI confirmed that it was just a media speculation ! Yet another (failed) attempt by Indian media and lobbyists to damage the situation .

I will say it again, I just don't get how the banks, the GOI or Jet thinks this is the best way to handle situations like this. There is no doubt in my mind that eh GOI does not want Jet to fail (and I think they are right by this). So given that, why not negotiate the settlement (since the GOI controls the banks) and roll out the solution asap. What is still going on behind the scenes that causes this to drag on and on. It is nothing short of a joke. To me this speaks volumes about the Indian business environment. So sloppy. On one hand you have the more of less efficient western capitalist economies like UK/US and then the ultra managed Chinese economy. I can't believe I am saying this, but I am starting to think that the Chinese system is probably more suited for India.

One can see conspiracy theory in everything if they have little bit of imagination. The situation Jet finds itself is bad, I wonder how people still think its all media hype. Jet pilots have threatened to strike if not paid dues by end of this month.

This is a complex deal and not something that can be done in a hurry. Banks have been exposed to thousands of crores. They can't just throw good money after bad. The biggest fear is whether Jet will end up like Kingfisher and end up with 8000 crores loss! The promoters are not willing to put in more money. There are reports that SBI and PNB are willing to put in Rs 500 crores as emergency funding but want it to have higher priority, which means other lenders need to agree to it. Goyal isn't willing to walk away from Jet without extracting his pound of flesh. EY isn't willing to invest more, or has bunch of conditions its insisting on. Everyone wants to look after their interests, which are conflicting with others'.

Even if banks take 51% share in 9W, they don't know how to run airline business. And once its majority PSB owned, there are lots of restrictions and oversight on running the company. And if the company still goes under, guess who the CAG and others will blame! The best that the banks are hoping for is that they get 51% stake and immediately sell at least 20-30% to EY. And is EY willing to buy that, and at which price & conditions?

That this is election year complicates matters. If banks take a huge haircut now, it will become a major issue. Same if 9W goes under. The situation has to be somehow managed to keep 9W afloat till end of May, when it will be 180 days since 1st default and it can be referred to NCLT. And elections will be over by then, so no major damage to ruling party.

In fact, taking 9W to NCLT might be best option looking at how things are turning out. Goyal will be out, Tatas or someone else might pick it up at a low price, banks will take around 50-60% haircut which is better than losing everything, and people will keep their jobs. Of course, the worst case is also possible that no one bids for 9W and company folds, banks lose 100% and people their jobs! But given that 9W still has some good reputation and holds slots in BOM, LHR etc and has a running operation, there is a good chance that there will be some bidder.

SBI, PNB ready to infuse Rs 500 crore in emergency funding for Jet Airways, says report

State-owned banks State Bank of India (SBI) and Punjab National bank (PNB) have agreed to infuse Rs 500 crore in emergency funding to Jet Airways, allowing the debt-laden airline to continue operations until the airline's lenders resolve debt restructuring, reported The Economic Times, citing sources close to the development.

The fresh debt is proposed to be ranked at higher seniority, which means it will be given first preference in the event of loan recovery, noted the report, citing a source.

..

SBI, PNB ready to pump in emergency funding for Jet Airways

Etihad conditions may delay debt-laden Jet Airways resolution plan

Etihad is waiting for clarity on the funding that State Bank of India (SBI) and National Investment and Infrastructure Fund (NIIF) will provide Jet Airways in terms of equity.

The Gulf carrier has been pitching for SBI and the NIIF to own 51 per cent and invest Rs 2,200 crore in the airline, said sources.

Etihad has sought the right of first refusal (RoFR) after one year and wants SBI to get a confirmation from the Securities and Exchange Board of India (Sebi) that the right, if exercised, will not trigger a mandatory open offer, said sources in the know.
...

dtw2hyd wrote:

China subsidizes aviation with pride to the extent of $1 Billion/year, not counting local subsidies.
India subsidizes aviation with a lot of guilt to the extent of $300 Million/year.

For 1 bn a year Chinese have built three very strong, very good and very large airlines. For 300 m year we have Air India.

While China airlines dump fares on the international market, on the domestic side the fares are still reasonable enough that the carriers can make a little money and unlike in India where the domestic market has vicious competition with frequent capacity dumping and selling below the cost.

hohd wrote:

While China airlines dump fares on the international market, on the domestic side the fares are still reasonable enough that the carriers can make a little money and unlike in India where the domestic market has vicious competition with frequent capacity dumping and selling below the cost.

So Air India is a viable business only as a monopoly with no competition where it is allowed to charge what it wants? Got it.

binayak wrote:

There were quite a few media articles saying SBI was about to move the NCLT route to recover loans from jet . The airline's stocks fell 5% due to the same .
Today SBI confirmed that it was just a media speculation ! Yet another (failed) attempt by Indian media and lobbyists to damage the situation .

So your point is the laws of the land should not be applicable to Jet Airways I.e. it should get Air India ‘like’ treatment.

Jet Airways' pilots will wear black arm bands to work from Friday, protesting the delay in disbursement of salaries. Where have we seen this before? Kingfisher pilots did the same in 2011-12.

unrave wrote:

Jet Airways' pilots will wear black arm bands to work from Friday, protesting the delay in disbursement of salaries. Where have we seen this before?

9W pilots have done this before too , I think more than once before ; 2012 & 2009ish.

https://m.economictimes.com/industry/transportation/airlines-/-aviation/jet-airways-founder-naresh-goyal-meets-pilots-to-persuade-them-to-stop-passive-protests/articleshow/12191623.cms

A lot of Jet Airways' flights haven been reportedly cancelled for the day. SBI has called for an emergency meeting with management of Jet and Etihad to iron out the issues with the resolution plan

unrave wrote:

A lot of Jet Airways' flights haven been reportedly cancelled for the day.

And most of those flight cancellations seem to be from Delhi.
Seems like their pilot protest at the capital has already started to some extent.

Yeah, looking more and more like Kingfisher II.

7 more aircraft grounded:

https://www.moneycontrol.com/news/busin ... 1.html/amp

Accept the airline is bankrupt. Sell to a willing buyer and let them reform Jet!

Most won't be made whole. If everyone holds out for their full share, the airline folds.

Lightsaber

lightsaber wrote:

7 more aircraft grounded:

https://www.moneycontrol.com/news/busin ... 1.html/amp

Accept the airline is bankrupt. Sell to a willing buyer and let them reform Jet!

Most won't be made whole. If everyone holds out for their full share, the airline folds.

Lightsaber

Which ones are grounded ? Long haul fleet or Medium/Short ? Thx.

nordikcam wrote:

Which ones are grounded ? Long haul fleet or Medium/Short ? Thx.

Majority grounded aircraft are B737s and ATR72s. Only one (out of 10) B777 and One (out of 8) A330 are grounded at MAA and BOM respectively.

9W can survive with just 10x77Ws and 25x737s to maintain full BOM schedule and a reduced DEL schedule.

Looking at latest cancellations, BLR(20) and DEL(50) were hit primarily.
I can see 9W network shrinking in this hypothetical order.
1) All P2P Domestic
2) BLR Domestic
3) DEL Additional frequencies
4) MAA-CDG
5) BLR-AMS
6) AUH feeder reductions

Protests by pilots called off:

https://www.livemint.com/companies/news ... 99621.html

In my opinion, getting the press was the value. A good call by union management.

Lightsaber

This is what a shrunk 9W network will look like.
One major hub - Mumbai, Delhi to serve partners and LHR

I think 10x77Ws and 25-30 737s can do most of it. Some regional flights and Delhi feed can be dropped.

Mumbai Domestic

Delhi Domestic

Mumbai-Int Westward, Delhi-LHR

Mumbai-Int Eastward

Unfortunately for Jet, Indigo will fly all the routes except Europe at much higher frequency and lower cost.

9W should go further and shrink down to 1x B737 and 1x B777. This is how their network will look like then


Looking at the state of Jet's finances pretty soon this will be the only network they'll be left with

vadodara wrote:

Unfortunately for Jet, Indigo will fly all the routes except Europe at much higher frequency and lower cost.

9W has partners with "real" codeshare/interline agreements. The other has only "stories" about partnerships.

10x77Ws are owned, no one can repo those. Failure to SLB is a blessing in disguise. They can give MX/MRO contract to AIESL.

Even if 50x737s and all A33Xs/ATRs are repoed by lessors, 9W still can keep Mumbai and part of Delhi, and service to LHR, AMS, CDG, and MAN

dtw2hyd wrote:

9W has partners with "real" codeshare/interline agreements. The other has only "stories" about partnerships.

Didn't realise Jet's partners would be able to operate domestic flights from BOM. Did India have a rule change or something?

vadodara wrote:

Unfortunately for Jet, Indigo will fly all the routes except Europe at much higher frequency and lower cost.

And except HKG too.

dtw2hyd wrote:

10x77Ws are owned, no one can repo those.

Will have been used as collateral for other funding, including new aircraft shortfalls, so are at risk.

dtw2hyd wrote:

Even if 50x737s and all A33Xs/ATRs are repoed by lessors, 9W still can keep Mumbai and part of Delhi, and service to LHR, AMS, CDG, and MAN

This is like the key scene in Downfall. "Everything will be fine with Steiner's attack."

Antarius wrote:

This is like the key scene in Downfall. "Everything will be fine with Steiner's attack."

Denial is just the first stage of grief

All B737MAX8 of Jet Airways have been grounded