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binayak
Posts: 611
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Re: Jet Airways: reports cash running out

Sun Oct 14, 2018 6:44 am

BawliBooch wrote:
sibibom wrote:
One underestimates the fall of Rupee, that would be a single biggest reason for Jet's demise.


Lets not get overtly dramatic! Its too early to use that D word. Not yet.

As much as Indigo fanboys would like to see their favored airline grab slots out of BOM, Jet is not going away just yet.

If only it were that simple! Clever PR campaigns can run a well run airline down or product down. Remember suzuki/Consumer Union in the US? A badly run airline with shaky fundamentals can still get a 5 star rating and all positive media attention if they hire the right PR people. It wont last forever because the fundamentals are not in place to back it up. Kingfisher did that for years before eventually falling!

People have short memories - Look at posts about Kingfisher on this very forum from a decade back. Till 2010 or so, KF was the airline that could do no wrong. I did a little bit of digging around. The very same people beating the Indigo drum today were back then singing praises for KF. The free tickets to Singapore/Maldives and free rides on the A380 was worth the effort of bashing AI on forums like these and long blogposts ! When the PR budget closed in, they switched loyalties. That is just how it works.

Jet is an airline which has its fundamentals in place. Will they be knocked out in the current round as Indigo goes for the kill? That might well happen, but I would be surprised if it did. People underestimate Naresh Goyal IMO. The way I see it, Spicejet is the most vulnerable to a sudden death scenario along with Air India.


TBH there is more media work to this jet airways story than reality (as I earlier pointed out) . Guess what at a time when jet is being bashed by media every day , you have (useless) articles written about how indigo outlasted rivals in several routes . PR to the next level.
And nowadays I find major discussions in this forums based on just media speculation . The media is bringing all kinds of illogical concepts to prove how mismanaged jet is .
There are still articles written about purchasing Sahara and its effects today!! Seriously , I know that purchasing Sahara was a bad decision but has little to do with its condition today . (It had lots to do with the condition in 2010-13 before stake sale happened) . And anything positive I post here , people quote me as their employee!!
The best preparation for tomorrow is doing your best today
 
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unrave
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Re: Jet Airways: reports cash running out

Sun Oct 14, 2018 7:34 am

An airline that cannot pay salaries on time and has to resort to parking wide-bodies to save cash is not just a victim of bad PR. Its debt is 4 times its market cap. You don't get there by bad PR alone. Kingfisher was kept artificially alive because VJM was able to hoodwink banks for long time including convert part of its debt into equity at a high premium. Banks are very wary of lending good money after bad now, so those options are not available to Jet. And their plan to sell stake in FF program has also failed. The only route available now is to sell stake in the airline itself - but the operations of Jet aren't worth much. I don't see end of the tunnel for Jet.
India: World's fastest growing major economy. World's fastest growing aviation market.
 
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binayak
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Re: Jet Airways: reports cash running out

Sun Oct 14, 2018 8:33 am

unrave wrote:
An airline that cannot pay salaries on time and has to resort to parking wide-bodies to save cash is not just a victim of bad PR. Its debt is 4 times its market cap. You don't get there by bad PR alone. Kingfisher was kept artificially alive because VJM was able to hoodwink banks for long time including convert part of its debt into equity at a high premium. Banks are very wary of lending good money after bad now, so those options are not available to Jet. And their plan to sell stake in FF program has also failed. The only route available now is to sell stake in the airline itself - but the operations of Jet aren't worth much. I don't see end of the tunnel for Jet.


Disagree on the debt part
Market cap $400mn (you mentioned earlier)
Debt $1.16bn (from their transcript of analyst call INR 8620cr )
That's not even 3 times .
Situation is bad but there have been worse situations.
Just for comparison , in 2009 their debt was double, huge losses (compared to the size of the airline), market cap nothing better, but they've managed to move on.
The best preparation for tomorrow is doing your best today
 
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unrave
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Re: Jet Airways: reports cash running out

Sun Oct 14, 2018 9:53 am

binayak wrote:
Disagree on the debt part
Market cap $400mn (you mentioned earlier)
Debt $1.16bn (from their transcript of analyst call INR 8620cr )
That's not even 3 times .
Situation is bad but there have been worse situations.
Just for comparison , in 2009 their debt was double, huge losses (compared to the size of the airline), market cap nothing better, but they've managed to move on.

The market cap has fallen significantly since then, but that is just splitting hairs. The noose is tightening and short of significant fund infusion and revenue increases I can't see how Jet can come out of this mess.
India: World's fastest growing major economy. World's fastest growing aviation market.
 
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SamYeager2016
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Re: Jet Airways: reports cash running out

Sun Oct 14, 2018 10:10 am

unrave wrote:
An airline that cannot pay salaries on time


Don't recall you lambasting Air India for the same?
 
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unrave
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Re: Jet Airways: reports cash running out

Sun Oct 14, 2018 10:17 am

SamYeager2016 wrote:

Don't recall you lambasting Air India for the same?

Well recall better then. I have been one of the most vocal critics of Air India. AI has something that Jet doesn't: the backing of the government, so even if salaries get delayed the do get paid eventually. GoI takes very good care of its employees.
India: World's fastest growing major economy. World's fastest growing aviation market.
 
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unrave
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Re: Jet Airways: reports cash running out

Mon Oct 15, 2018 12:55 am

The parked 777 of Jet is now being harvested for its parts at MAA
Image
Image Credit: @shukla_tarun

It is uncanny how all distressed Indian carriers behave the same way. Yet another another act from the playbook of Kingfisher
India: World's fastest growing major economy. World's fastest growing aviation market.
 
sibibom
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Re: Jet Airways: reports cash running out

Mon Oct 15, 2018 5:07 am

unrave wrote:
The parked 777 of Jet is now being harvested for its parts at MAA
Image
Image Credit: @shukla_tarun

It is uncanny how all distressed Indian carriers behave the same way. Yet another act from the playbook of Kingfisher


FAKE NEWS! FAKE NEWS! You are a stooge of Indigo! It's clearly morphed by you, and Indigo is giving you free tickets for the same. Sarcasm ends.

I guess we are heading to KF of 2012 scenario. Deny all you want.

Having the said that I sincerely hope they can turn it around somehow like Spicejet did. But the problem is Naresh Goyal and his Baniya business style. Most international players are wary of his "interference".
 
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unrave
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Re: Jet Airways: reports cash running out

Mon Oct 15, 2018 7:58 am

sibibom wrote:
It's clearly morphed by you, and Indigo is giving you free tickets for the same.

First class RTW ticket on a chartered A380. My PR services don't come cheap.

Meanwhile in the real world, the fundamentally strong airline whose only fault is bad PR cannot even provide a timeline for the payment of the first tranche of October salaries, which was supposed to be paid on the 11th of this month.
https://www.businesstoday.in/sectors/av ... 85143.html
India: World's fastest growing major economy. World's fastest growing aviation market.
 
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Spiderguy252
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Re: Jet Airways: reports cash running out

Mon Oct 15, 2018 8:28 am

BawliBooch wrote:
Jet is an airline which has its fundamentals in place. Will they be knocked out in the current round as Indigo goes for the kill? That might well happen, but I would be surprised if it did. People underestimate Naresh Goyal IMO. The way I see it, Spicejet is the most vulnerable to a sudden death scenario along with Air India.


Air India and death, leave alone a sudden one? What is this mysterious phenomenon that you speak of?
Vahroone
 
sibibom
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Re: Jet Airways: reports cash running out

Mon Oct 15, 2018 8:48 am

Air India has a sugar daddy that will never allow it to die, so someone else will have to die instead.
 
CaliguyNYC
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Re: Jet Airways: reports cash running out

Mon Oct 15, 2018 1:48 pm

So what is the reason that Jet is in such bad shape? Are the international or domestic flights the issue? I really like Jet. Are they perfect - no, not at all. But they deliver pretty consistent service on their international flights (flown BOM-LHR/AMS/CDG). All 4 flights were on time. Was in J, seats clean and worked, IFE good but not great and food very good. I hope they can turn things around. On each of my flights, they upgraded Jet FF from J to F. While F needs to go, I would imagine that free upgrade would incentivize business travelers to fly Jet. But I guess not.
 
VTORD
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Re: Jet Airways: reports cash running out

Mon Oct 15, 2018 2:15 pm

CaliguyNYC wrote:
So what is the reason that Jet is in such bad shape? Are the international or domestic flights the issue? I really like Jet.

Allegedly Goyal Sahib has a very mercurial way of operating and the C-suite usually has problems getting along with the man. For. eg., the Sahara deal. He actually did try to back out of it but could not. The EY deal is a prime example. He took EY's money when he needed it and then promptly jumped in bed with DL-AF-KL. Now this may not be one of the reasons they are in trouble but an example of how he operates.

Then few years ago, they had a really confusing model for a while to compete in both the FSC and LCC brackets. I would get a 9W code out and S2 back with varying in-flight service levels.

Also they are competing with 6E who tend to dump capacity on routes and AI who have a sugar daddy in GoI. The rupee has slid from 48 to 73+ on the $ since 2008 but to compete Jet is still charging 2008-2010 fares on a FSC model.
Twitter: @spottingfoodie
 
sibibom
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Re: Jet Airways: reports cash running out

Mon Oct 15, 2018 2:35 pm

CaliguyNYC wrote:
So what is the reason that Jet is in such bad shape? Are the international or domestic flights the issue? I really like Jet. Are they perfect - no, not at all. But they deliver pretty consistent service on their international flights (flown BOM-LHR/AMS/CDG). All 4 flights were on time. Was in J, seats clean and worked, IFE good but not great and food very good. I hope they can turn things around. On each of my flights, they upgraded Jet FF from J to F. While F needs to go, I would imagine that free upgrade would incentivize business travelers to fly Jet. But I guess not.


Makes me wonder as well. For an airline that actually was in the green couple of years back, things really went south really fast. Something isn't adding up.

Having said that they really cut corners for 3-4 years. The food is almost always inedible. They should rather have a buying option with better stuff. Interiors have been showing their age. The new MAXs were supposed to have helped with that. The staff seems unhappy, and aren't up to the standards they themselves set years back.
 
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unrave
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Re: Jet Airways: reports cash running out

Mon Oct 15, 2018 2:46 pm

CaliguyNYC wrote:
So what is the reason that Jet is in such bad shape?

Lala behaviour interfering with business decisions, influence of Mrs Goyal, pile-up of debt in the pre GFC period, inability to adapt to compete with LCCs, and an owner who would rather see the airline sink than let his stake go below 51%.
India: World's fastest growing major economy. World's fastest growing aviation market.
 
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lightsaber
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Re: Jet Airways: reports cash running out

Mon Oct 15, 2018 3:08 pm

sibibom wrote:
Air India has a sugar daddy that will never allow it to die, so someone else will have to die instead.

That sums it up. I'd like to know the value in dollars of the AI bailout. That means AI has first dibs at value customers.

Lightsaber
You only have the first amendment with the 2nd. If you're not going to offend someone with what you say, you don't have the 1st.
 
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unrave
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Re: Jet Airways: reports cash running out

Mon Oct 15, 2018 4:09 pm

lightsaber wrote:
sibibom wrote:
Air India has a sugar daddy that will never allow it to die, so someone else will have to die instead.

That sums it up. I'd like to know the value in dollars of the AI bailout. That means AI has first dibs at value customers.

Lightsaber

Approx USD7.5 bn since 2012 at market exchange rated
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readytotaxi
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Re: Jet Airways: reports cash running out

Mon Oct 15, 2018 4:09 pm

Thread Title "_ _ _ _ _ _ " airways/airlines reports cash running out.
Air India
Alitalia
South African
Norwegian
Just never seems to happen.
you don't get a second chance to make a first impression!
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Byrdluvs747
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Re: Jet Airways: reports cash running out

Mon Oct 15, 2018 4:28 pm

readytotaxi wrote:
Thread Title "_ _ _ _ _ _ " airways/airlines reports cash running out.
Air India
Alitalia
South African
Norwegian
Just never seems to happen.



Norwegian doesn't belong on that list. They have at least some semblence of a business plan and management.

If DY fails, then thats it. There's no billions of state aid dollars to bail them out. All the others have govt sugar-daddies to prop up their incompetence.
The 747: The hands who designed it were guided by god.
 
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unrave
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Re: Jet Airways: reports cash running out

Tue Oct 16, 2018 3:15 am

Jet offers up to 50 days of leave without pay to flight attendants
https://www.business-standard.com/artic ... 112_1.html
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lightsaber
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Re: Jet Airways: reports cash running out

Tue Oct 16, 2018 3:57 am

unrave wrote:
Jet offers up to 50 days of leave without pay to flight attendants
https://www.business-standard.com/artic ... 112_1.html

That implies the company is shrinking...

Byrdluvs747 wrote:
readytotaxi wrote:
Thread Title "_ _ _ _ _ _ " airways/airlines reports cash running out.
Air India
Alitalia
South African
Norwegian
Just never seems to happen.



Norwegian doesn't belong on that list. They have at least some semblence of a business plan and management.

If DY fails, then thats it. There's no billions of state aid dollars to bail them out. All the others have govt sugar-daddies to prop up their incompetence.

Agreed Norwegian doesn't belong.

Air India has been rescued by the government at great cost.
Alitalia has been through how many government funded re-investments?
South African is failing again and will need billions of Euros/dollars to survive.

Is Jet going to receive billions from the GoI? I very much doubt it.

There are plenty of commercial airlines that have failed. PanAm, Eastern, and Kingfisher all come to mind. Others that technically failed and were partially rescued is TWA, Sabina, and Swiss.

Jet can monetize some assets. Will that be enough?

Lightsaber
You only have the first amendment with the 2nd. If you're not going to offend someone with what you say, you don't have the 1st.
 
downdata
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Re: Jet Airways: reports cash running out

Tue Oct 16, 2018 4:24 am

readytotaxi wrote:
Thread Title "_ _ _ _ _ _ " airways/airlines reports cash running out.
Air India
Alitalia
South African
Norwegian
Just never seems to happen.


“Cash running out” does not mean immediate bankruptcy. It has happened. What hasn’t happened is they’ve actually went into administration and cesased to br a going concern.
 
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unrave
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Re: Jet Airways: reports cash running out

Tue Oct 16, 2018 9:01 am

Jet Airways aircraft out of action:
5 ATR
5 B737
1 A330
1 B777
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unrave
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Re: Jet Airways: reports cash running out

Tue Oct 16, 2018 9:22 am

Some details about how Jet manages to fly its routes wit so many aircraft on ground:
https://livefromalounge.boardingarea.co ... grounding/

Jet Airways was operating Airbus A330s on their domestic metro routes such as Delhi to Mumbai (6 times daily Airbus A330 flights), Kolkata and Chennai, which have been replaced by the Boeing 737s.

Jet Airways Mumbai – Singapore and Mumbai – Doha routes were operated by an Airbus A330 as well, which are now flown by a mix of Boeing 737, 77Ws and Airbus A332s. The Hong Kong flights also see a mix of A332s and B77Ws aircraft. Mumbai – Damman and Delhi – Doha routes are downgauged from A332s to 737s.
India: World's fastest growing major economy. World's fastest growing aviation market.
 
lutfi
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Re: Jet Airways: reports cash running out

Tue Oct 16, 2018 9:55 am

Last time I flew Jet (in September) I was given 'special offer' to upgrade to business class three times at the airport... Staff have obviously been told to sell, sell sell.
 
sibibom
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Re: Jet Airways: reports cash running out

Tue Oct 16, 2018 10:35 am

lutfi wrote:
Last time I flew Jet (in September) I was given 'special offer' to upgrade to business class three times at the airport... Staff have obviously been told to sell, sell sell.


Next time you fly in First, they may offer to sell the airline for the right price :rotfl:
 
Amsterdam
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Re: Jet Airways: reports cash running out

Tue Oct 16, 2018 10:53 am

Why cant these indian airlines not make enough money?

The whole world aviation is making record profits.

What is different there?
 
Sindhuputra
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Re: Jet Airways: reports cash running out

Tue Oct 16, 2018 11:22 am

1. Air India is the first reason Amsterdam.
2. Siphoning of airline funds is the second reason ( by a variety of actors at different times )
3. indigo is reason #3
 
sibibom
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Re: Jet Airways: reports cash running out

Tue Oct 16, 2018 12:45 pm

Sindhuputra wrote:
1. Air India is the first reason Amsterdam.
2. Siphoning of airline funds is the second reason ( by a variety of actors at different times )
3. indigo is reason #3


Indigo is becoming what Lufthansa or BA has become in their home countries, too damn big for other's comfort, basically killing off competition. Maybe India needs a strong no.2 airline to keep Indigo in check. Sadly Jet isn't filling that role anymore.
 
AI
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Re: Jet Airways: reports cash running out

Wed Oct 17, 2018 8:43 pm

Tatas in talks to pick up stake in struggling Jet Airways -

https://timesofindia.indiatimes.com/bus ... source=sms

Fingers crossed.
 
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BawliBooch
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Re: Jet Airways: reports cash running out

Thu Oct 18, 2018 2:44 am

VTORD wrote:
CaliguyNYC wrote:
So what is the reason that Jet is in such bad shape? Are the international or domestic flights the issue? I really like Jet.

Allegedly Goyal Sahib has a very mercurial way of operating and the C-suite usually has problems getting along with the man. For. eg., the Sahara deal. He actually did try to back out of it but could not. The EY deal is a prime example. He took EY's money when he needed it and then promptly jumped in bed with DL-AF-KL. Now this may not be one of the reasons they are in trouble but an example of how he operates.


More than Mr.Goyal, the professional management has had problems with the Mrs. The worst idea's to come from Jet, like the infamous Konnect idea, came from the Mrs. For a start, he has to cut her loose - from the airline that is. If I understand NG's philosophy, he has been trying to run a FSC airline with LCC costs. His belief is that there can be no such thing as a true LCC in India because of the shared infrastructure and crew/maintenance costs being about the same for everyone.

I still think people are jumping the gun wrt Jet's demise. Its not happening. Not right now. Spice will go before Jet.


Spiderguy252 wrote:
BawliBooch wrote:
Jet is an airline which has its fundamentals in place. Will they be knocked out in the current round as Indigo goes for the kill? That might well happen, but I would be surprised if it did. People underestimate Naresh Goyal IMO. The way I see it, Spicejet is the most vulnerable to a sudden death scenario along with Air India.


Air India and death, leave alone a sudden one? What is this mysterious phenomenon that you speak of?


Spicejet is stretched too thin. The spice cargo venture is cash pit. They are surviving purely because their owner Ajay Singh is close to the Supreme Leader. Ajay Singh worked on Supreme Leader's election campaign and was the genious who coined the now infamous "Ab ki baar" campaign slogan. He was suitably rewarded with control of spicejet by kicking out the Marans.

How will the Sudden Death scenario play out for airlines in India? Well: rewind back to 2014 and the way Spicejet, then owned by the Maran family, was grounded overnight allegedly for non-payment of dues. They had a 3 month lien from fuel companies like all airlines in the country do. But immediately after the Govt changed in 2014, state owned fuel companies suddenly took the call that the airline would have to be put on cash & carry - meaning pay fuel bills immediately. It effectively meant the grounding of scores of Spice flights. The Maran's saw the writing on the wall and sold off to Ajay Singh. voila! The state owned fuel companies restored the 3 month line of credit and the airline was flying again!

That could happen again with Air India and Spicejet. We could discuss the reasons, but i think that would be a topic for Non-Aviation forum.

To get the discussion back to Jet Airways, I dont think the situation is as grim as people are painting it out to be. I was in India when KFA went down and the situation was totally different.
Mr.Kapoor's favorite poodle! on twitter @Banwaarilal
 
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BawliBooch
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Re: Jet Airways: reports cash running out

Thu Oct 18, 2018 2:48 am

Perhaps its time for the very talented Mr.Kapoor to speak out on the reasons he switched airlines. I know its a very entertaining (and educational) story.

People should know! :)
Mr.Kapoor's favorite poodle! on twitter @Banwaarilal
 
behramjee
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Re: Jet Airways: reports cash running out

Thu Oct 18, 2018 4:42 am

AI wrote:
Tatas in talks to pick up stake in struggling Jet Airways -

https://timesofindia.indiatimes.com/bus ... source=sms

Fingers crossed.


Tatas should really stay out of 9W's mess as there is no need for them to absorb on such a large debt profile. They should just focus to grow organically through Vistara.
 
dtw2hyd
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Re: Jet Airways: reports cash running out

Thu Oct 18, 2018 4:15 pm

BawliBooch wrote:
...
To get the discussion back to Jet Airways, I dont think the situation is as grim as people are painting it out to be..


Jet had close to 10 WBs sun bathing at DEL T2?? around 2012. Analysts had no issues. Now they are complaining about 2 WBs parked. I guess they were getting lunch coupons and free upgrades from Jet.

They were also busy going after AI for grounding poor ANI which was under wing box repairs. ISpyForChai was supplying photos from Mumbai MRO facility.

SpiceJet had AOG Q400 with missing engines, but bloggers were going nuts about AI not keeping mothballed ALH in clean condition.

Very hard to give any credibility to av pundits analysis.
 
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BawliBooch
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Re: Jet Airways: reports cash running out

Thu Oct 18, 2018 4:24 pm

dtw2hyd wrote:
They were also busy going after AI for grounding poor ANI which was under wing box repairs. ISpyForChai was supplying photos from Mumbai MRO facility.

Offline DM please! :)

dtw2hyd wrote:
SpiceJet had AOG Q400 with missing engines, but bloggers were going nuts about AI not keeping mothballed ALH in clean condition.

Beer & gupshup with (then) CEO(once). Free tickets for travel with the missus! Good deal for a blogger mehn!
Mr.Kapoor's favorite poodle! on twitter @Banwaarilal
 
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BawliBooch
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Re: Jet Airways: reports cash running out

Fri Oct 19, 2018 1:16 am

Do we have any details on what parts were "harvested" from the parked 777? This is a serious claim to make! Any evidence to back it up?

UNVERIFIED information - 1 77W is being taken to Amman (perhaps she meant AUH?). Is it JEX? Leasing it out to some other operator again? Either ways we dont have confirmation yet that Jet Airways has cannibalised the aircraft for spares as is being alleged by some people.
Mr.Kapoor's favorite poodle! on twitter @Banwaarilal
 
blrsea
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Re: Jet Airways: reports cash running out

Fri Oct 19, 2018 6:02 am

Tatas want the Goyals out of Jet if they invest in 9W. But looks like Goyals want to retain some operational control post stake-sale. Tried to do same with PE firm TPG Capital and failed due to same reason.

Tatas not OK with Goyal in Jet Airways cockpit, wants complete control over the airline

People close to the talks said the Tata Group has made it clear to Jet representatives that it is interested in an outright purchase either of the entire company or its assets such as aircraft and other aviation-related infrastructure.

It will not, however, be interested in a deal where the Goyals, who currently own 51 per cent of Jet, retain significant control. The Times of India had reported on Thursday that the Tata Group and Jet Airways were in initial talks for a stake sale.

Jet representatives offered the Tatas 26 per cent and some board-level positions, including vice-chairmanship. This proposal has been rejected. “The Tatas are interested in buying out the entire airline and significantly scaling up the existing business,” said a top official close to the development.
...
...
Texas-based private equity giant TPG Capital had also rejected a similar offer for part-ownership by Jet Airways. Goyal and wife Anita own 51 per cent in the airline while UAE’s Etihad Airways has 24 per cent stake.

The airline had two rounds of negotiations with TPG Capital, but the talks got stuck due to differences over controlling rights and Goyal’s demand for a role post acquisition. A spokesperson for TPG declined to comment.
...
 
JOYA380B747
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Re: Jet Airways: reports cash running out

Fri Oct 19, 2018 6:31 am

Just a personal question, should I use up all my JP miles soon or not. I don't want to wake up one morning and find out that 30-50 flights worth of my miles have gone down the bankruptcy dust!
If it wasn't for AI and those money mongers sitting in the parliament, 9W would have been as big as SQ...:(
 
zionite
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Re: Jet Airways: reports cash running out

Fri Oct 19, 2018 6:48 am

JOYA380B747 wrote:
Just a personal question, should I use up all my JP miles soon or not. I don't want to wake up one morning and find out that 30-50 flights worth of my miles have gone down the bankruptcy dust!

#metoo... Same worries. Planning to redeem my miles on 9W partners Delta, Air France & KLM in early next year. If I book the ticket now while its still possible, will the partners honour the tickets if 9W closes down by time of my travel?
 
avier
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Re: Jet Airways: reports cash running out

Fri Oct 19, 2018 6:58 am

behramjee wrote:
Tatas should really stay out of 9W's mess as there is no need for them to absorb on such a large debt profile. They should just focus to grow organically through Vistara.

blrsea wrote:
Tatas want the Goyals out of Jet if they invest in 9W. But looks like Goyals want to retain some operational control post stake-sale. Tried to do same with PE firm TPG Capital and failed due to same reason.

Tatas not OK with Goyal in Jet Airways cockpit, wants complete control over the airline



With sparse slots available at major airports, one can wonder how Vistara can grown much organically. Also in regards to targeting premium pax, the Financial capital would be a better bet than the National Capital. And 9W has that advantage.

Only concern for NG in giving off 9W completely to TATA's would be if the 9W brand would be dissolved and merged into Vistara.

Also one needs to know SQ's stance on this, since TATA's being present in two FSC's would result in them competing amongst themselves.
 
sibibom
Posts: 181
Joined: Fri Aug 12, 2016 7:04 am

Re: Jet Airways: reports cash running out

Fri Oct 19, 2018 11:07 am

Jet Airways stake sale: End game for Naresh Goyal?

https://www.moneycontrol.com/news/busin ... 63951.html

It's all coming down to Naresh Goyal, will he swallow his pride and let the airline survive. Or has he already burned too many bridges and it's too late now?
 
dtw2hyd
Posts: 6171
Joined: Wed Jan 09, 2013 12:11 pm

Re: Jet Airways: reports cash running out

Fri Oct 19, 2018 11:38 am

BawliBooch wrote:
Do we have any details on what parts were "harvested" from the parked 777? This is a serious claim to make! Any evidence to back it up?

UNVERIFIED information - 1 77W is being taken to Amman (perhaps she meant AUH?). Is it JEX? Leasing it out to some other operator again? Either ways we dont have confirmation yet that Jet Airways has cannibalised the aircraft for spares as is being alleged by some people.


Fineprint in some lease contracts mandate lessee maintain the frame at a lessor certified MRO facility. Apparently, Amman is the lessor prefeferred location. For this reason, a lot of lessors are blacklisted at Air India. AI and lessors had a long litigation on the FAA-certified MRO facility vs lessor certified MRO facility issue. Finally, AI decided to blacklist those lessors. There are more details in the CAG report.

This is a ripoff to overcharge lease-end condition penalties. Indian carriers never learn from other's mistakes.

Using parts from a grounded frame is a common practice, helps with despatch reliability nd cashflow. Even the world's largest airline do it, absolutely nothing wrong.
 
dtw2hyd
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Re: Jet Airways: reports cash running out

Fri Oct 19, 2018 12:18 pm

sibibom wrote:
...
It's all coming down to Naresh Goyal, will he swallow his pride and let the airline survive. Or has he already burned too many bridges and it's too late now?


If Subramanian Swamy's theory of UAE sovereign fund indirectly holding Goyal's stake through HSBC is true, Goyal may not be own anything. Wouldn't it be rather difficult to untangle to sell his stake to anybody? I know Swamy make wild claims, but his theories generally connect the dots.
 
CaliguyNYC
Posts: 458
Joined: Tue Sep 27, 2016 7:27 pm

Re: Jet Airways: reports cash running out

Fri Oct 19, 2018 1:38 pm

avier wrote:
behramjee wrote:
Tatas should really stay out of 9W's mess as there is no need for them to absorb on such a large debt profile. They should just focus to grow organically through Vistara.

blrsea wrote:
Tatas want the Goyals out of Jet if they invest in 9W. But looks like Goyals want to retain some operational control post stake-sale. Tried to do same with PE firm TPG Capital and failed due to same reason.

Tatas not OK with Goyal in Jet Airways cockpit, wants complete control over the airline



With sparse slots available at major airports, one can wonder how Vistara can grown much organically. Also in regards to targeting premium pax, the Financial capital would be a better bet than the National Capital. And 9W has that advantage.

Only concern for NG in giving off 9W completely to TATA's would be if the 9W brand would be dissolved and merged into Vistara.

Also one needs to know SQ's stance on this, since TATA's being present in two FSC's would result in them competing amongst themselves.


I think the Goyals need to bow out. If they want keep a small stake in the airline (or Tata stock) and maybe a board seat as a major shareholder. But that is it. As far as the name, I don't care. Part of me says shift to Vistara brand and start fresh (you can keep some flights as pure Jet and have the rest code share with Jet to not confuse casual Indian travelers). The Tatas know they cannot grow Vistara organically. Plus Vistara's BOM slots plus Jet's would allow a combined BOM hub to be slightly bigger (seems like only 11 slots). They can take all of UX's BOM-DEL slots and reallocate. Just fly high density A330 on BOM-DEL with Jet's current schedule (rip out the lie flat J).
 
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Momo1435
Posts: 699
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Re: Jet Airways: reports cash running out

Fri Oct 19, 2018 2:11 pm

Tata also has a 49% stake in AirAsia India. I wonder if this will have any effect on the Air India situation, the government could let Air India fail if they think Tata will turn Jet into a good replacement as the national carrier. Especially if they will also buy a large part of Etihad, making it "more Indian".
 
CaliguyNYC
Posts: 458
Joined: Tue Sep 27, 2016 7:27 pm

Re: Jet Airways: reports cash running out

Fri Oct 19, 2018 2:59 pm

Momo1435 wrote:
Tata also has a 49% stake in AirAsia India. I wonder if this will have any effect on the Air India situation, the government could let Air India fail if they think Tata will turn Jet into a good replacement as the national carrier. Especially if they will also buy a large part of Etihad, making it "more Indian".


While I agree the etihad stake should be bought out, I think it is pretty clear that Jet/Vistara will need a western JV partner (which usually also means an investment). While SQ is nice, the area where help is needed is to US/EU. Ideally a new Jet/Vistara would be 10% SQ and 10%AF/KL/DL and the rest Tatas / Indian public shareholders.
 
sibibom
Posts: 181
Joined: Fri Aug 12, 2016 7:04 am

Re: Jet Airways: reports cash running out

Fri Oct 19, 2018 4:07 pm

The best case Scenario for the Goyal at the moment is keeping a smaller stake (5-10%) in new combined Jet-Vistara entity, with a seat on the board and no say in the day to day running of the Airline. Encash their work for 25 years and retire to the Isle of Man or wherever they are supposedly based.
 
VTORD
Posts: 327
Joined: Sat Dec 22, 2012 9:45 pm

Re: Jet Airways: reports cash running out

Fri Oct 19, 2018 5:11 pm

Momo1435 wrote:
Especially if they will also buy a large part of Etihad, making it "more Indian".

You mean they will buy "Etihad's stake in Jet" not a stake in Etihad itself" right?

CaliguyNYC wrote:
Ideally a new Jet/Vistara would be 10% SQ and 10%AF/KL/DL and the rest Tatas / Indian public shareholders.

That may not be as simple as how you have spelled it out. How would SQ/DL feel about a combined UK-9W partnering extensively with competition? Plus there's the new code share with BA that Vistara just announced (albeit on the India side). My guess is, IF this was to happen, then SQ would prefer to push Vistara to SA rather than ST. They already have a relationship with LH plus I have been seeing UK flights on domestic legs of LH bookings to secondary cities in India (not AI which was surprising). Long story short: the Tatas better know what they are doing. Things were going fine with Kingfisher until Mallya thought of "organic growth" and made a play Deccan.
Twitter: @spottingfoodie
 
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BawliBooch
Posts: 1248
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Re: Jet Airways: reports cash running out

Sat Oct 20, 2018 4:37 am

sibibom wrote:
The best case Scenario for the Goyal at the moment is keeping a smaller stake (5-10%) in new combined Jet-Vistara entity, with a seat on the board and no say in the day to day running of the Airline. Encash their work for 25 years and retire to the Isle of Man or wherever they are supposedly based.

The holding company Tailwinds is regd in the Isle of Mann. The Goyal family is based in London.

IMO, Goyal wont go quietly. But if he does it will be a complete exit.

dtw2hyd wrote:
If Subramanian Swamy's theory of UAE sovereign fund indirectly holding Goyal's stake through HSBC is true, Goyal may not be own anything. Wouldn't it be rather difficult to untangle to sell his stake to anybody? I know Swamy make wild claims, but his theories generally connect the dots.


Swamy takes a half-truth and spins it to whatever cock-a-doodle-doo theory he is working on. But as journalists, we do appreciate him for giving us the leads. With Swamy, we learn to follow the leads and ignore his conclusions.

I have tried to look into the complicated Jet ownership saga at the beginning of my career hoping for a big story. We tried very hard but found absolutely nothing! I am pretty sure Goyal was doing some pretty major jhol with all the complicated network of holding companies regd in different tax havens and a lot of cross holding thing going on. Jet had access to seemingly endless supply of cash coming from somewhere. They were flying 737-300/400's at a time when all the competition was flying 737-200's. Expensive game. Where was this money coming from? Goyal also found the money to buy back the stake held by Kuwait Airways & Gulf Airways. Again, where was he getting the money from? As my editor said in closing, "Unethical but not illegal". I am given to understand, that Jet cleaned up a lot of this complicated tangle around 2005. Perhaps the Emirati Sovereign Funds were swapped in at that time?

The same thing applied to Kingfisher as well and now applies to Indigo. Holding companies registered in tax havens doing deals with other companies in which they have cross holdings, SLB's being done with the same bunch of Leasing companies with familiar names - again registered in tax havens. Interesting that names of holding companies that popped up when we were looking into Kingfisher are showing up again when we look at Indigo! Hubli Leasing, Oceans Air, Ocean Aviation, Magic Aviation? Who really owns these companies?

As I understand it, ALL airlines in India are using Taxpayer's directly or indirectly! :P
Mr.Kapoor's favorite poodle! on twitter @Banwaarilal
 
dtw2hyd
Posts: 6171
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Re: Jet Airways: reports cash running out

Sat Oct 20, 2018 12:24 pm

Hypothesis

@BawliBooch

Etihad - 24%
Indian individual/institutional investors - 25%
Goyal - 8%
Unknown off-shore investors/guarantors- 43% (Goyal as a proxy, 2013 swap)

For the sale to complete, the buyer has to pay 2013 prices for 43% of shares, I don't see why off-shore guarantors will take a haircut.
Even if the buyer can find funds to complete the sale, it will not fix the underlying problem of lack of working capital.

Several reasons 9W cannot be sold.
1) Indian Banks are not in a position to lend money. Asking for future plans/financial statements is just a cover story.
2) TATAs have no money, Indians seems to take offense with this statement, but it is valid.
3) Singapore has no money. SIA group is barely surviving.
4) Delta has money, but RBI ECB limit rules prohibit Delta from bringing in working capital from outside India.
5) QR is capable, but Qatar-UAE may not play ball to unwind the 43% mess, assuming UAE is the guarantor for the unknown part.
6) No one will pay 2013 markup in 2018 for 9W.

/Hypothesis
Please continue the fact-based discussion.
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