blrsea
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Re: Jet Airways: reports cash running out

Fri Nov 02, 2018 3:05 am

Now. Jet is allowing pilots to quit without notice period. Looks like quite a few ATR pilots are putting in their papers. I had read another news report of 6E delaying their ATR deliveries due to shortage of pilots. Maybe they can pick up some pilots from 9W.

Jet Airways allows pilots to quit without notice

MUMBAI: Jet AirwaysNSE 1.22 % has given its pilots the option to leave the airline without serving a notice period as the financially stressed carrier cuts capacity and operations amid a cash crunch. Many are opting for this given the uncertainty around Jet’s ability to stay afloat, people close to the situation said.

More than 50 pilots have resigned in the last couple of months with most leaving after serving a notice period of just 48 hours. These comprise mostly pilots of ATR turboprop planes. Out of its 16 ATRs, Jet has grounded three and plans to put six out of operation shortly. It operates a total of 124 aircraft.
...
The company’s salary expenses ballooned 53% in the last five years and the reasons include a top-heavy workforce full of expatriate executives. Several managerial executives have been handed out pink slips in the past four months but the top management has not been touched yet.
...
Meanwhile, representatives from a union comprising 1,180 of Jet’s pilots approached chairman Naresh Goyal on Wednesday asking for a firm clearance of their salary arrears.

Most of them did not even get 75% of the remuneration for the last month, said a person in the know of the matter. The management had assured them of some clarity by the end of November.

...
 
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unrave
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Re: Jet Airways: reports cash running out

Fri Nov 02, 2018 3:14 am

All is well All is well. What is the need for pilots when NG can magically fly the planes with his mind power?
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Antarius
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Re: Jet Airways: reports cash running out

Fri Nov 02, 2018 3:51 am

unrave wrote:
All is well All is well. What is the need for pilots when NG can magically fly the planes with his mind power?


Silence your tea and snacks bought heresy!!
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unrave
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Re: Jet Airways: reports cash running out

Fri Nov 02, 2018 5:23 am

Jet Airways now offers JP miles in lieu of lounge access at Mumbai. How valuable will those miles be 6 months from now?
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vadodara
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Re: Jet Airways: reports cash running out

Fri Nov 02, 2018 1:30 pm

Very curious what end game does NG have in mind. Letting all the animals run is hardly the optimum way if you still want to sell the farm.

Seems like, there are 2 offers on the table:
a) Tata's still would like to run an airline, but they want NG's 51%
b) Delta likes the feed at AMS, if anything, it might want to expand as a way to get some cut from the ME3 plus likes of BA/LH

My sense is NG may prefer (b). In this way, as the 'Indian' entity, he can still keep his fingers in the pie.

The question becomes, how much is DL willing to tolerate NG especially when they have put in some real money!
 
Exeiowa
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Re: Jet Airways: reports cash running out

Fri Nov 02, 2018 1:38 pm

blrsea wrote:
Now. Jet is allowing pilots to quit without notice period. Looks like quite a few ATR pilots are putting in their papers. I had read another news report of 6E delaying their ATR deliveries due to shortage of pilots. Maybe they can pick up some pilots from 9W.

Jet Airways allows pilots to quit without notice

MUMBAI: Jet AirwaysNSE 1.22 % has given its pilots the option to leave the airline without serving a notice period as the financially stressed carrier cuts capacity and operations amid a cash crunch. Many are opting for this given the uncertainty around Jet’s ability to stay afloat, people close to the situation said.

More than 50 pilots have resigned in the last couple of months with most leaving after serving a notice period of just 48 hours. These comprise mostly pilots of ATR turboprop planes. Out of its 16 ATRs, Jet has grounded three and plans to put six out of operation shortly. It operates a total of 124 aircraft.
...
The company’s salary expenses ballooned 53% in the last five years and the reasons include a top-heavy workforce full of expatriate executives. Several managerial executives have been handed out pink slips in the past four months but the top management has not been touched yet.
...
Meanwhile, representatives from a union comprising 1,180 of Jet’s pilots approached chairman Naresh Goyal on Wednesday asking for a firm clearance of their salary arrears.

Most of them did not even get 75% of the remuneration for the last month, said a person in the know of the matter. The management had assured them of some clarity by the end of November.

...



I was wondering if this is a typical ratio of pilots to airplanes in the case of Jet 1180 pilots to 124 planes. Obviously the type of flying an airline does would impact your staffing needs but this is 9.5 pilots per plane.
 
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unrave
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Re: Jet Airways: reports cash running out

Fri Nov 02, 2018 1:58 pm

To me it increasingly appears that NG would rather take the airline down with him than letting go. I believe he is trying to cling on to the airline for another 6 months hoping for a change in government and a return of the 'dial mantri to get 1000 crore from SBI' days.
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unrave
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Re: Jet Airways: reports cash running out

Sat Nov 03, 2018 9:31 am

Want last year's bonus, sell our tickets: Jet Airways tells travel agents
https://www.business-standard.com/artic ... 272_1.html
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VTORD
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Re: Jet Airways: reports cash running out

Sat Nov 03, 2018 4:18 pm

unrave wrote:
To me it increasingly appears that NG would rather take the airline down with him than letting go. I believe he is trying to cling on to the airline for another 6 months hoping for a change in government and a return of the 'dial mantri to get 1000 crore from SBI' days.


Must agree with you that it is the more and more likely scenario. The man simply does not want to let go.

About the 2nd part of your statement, let's assume your hypothesis is correct. Even then, what NG is hoping for will not happen. You have no idea what the dynamics will be in May '19 and I doubt any "changed" government mantri would make this the first priority in their list. Unless of course the legendary NG magic is at work in ways we don't know. Yet.
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lightsaber
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Re: Jet Airways: reports cash running out

Sat Nov 03, 2018 4:46 pm

unrave wrote:
Want last year's bonus, sell our tickets: Jet Airways tells travel agents
https://www.business-standard.com/artic ... 272_1.html

Putting the screws to sales works, until it doesn't. Travel agencies should hold back funds just as credit card companies do...

The current owners need to let go. Jet can be saved, but it needs a restructure 6 months+ ago. If the current owner wouldn't let EY restructure...


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vadodara
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Re: Jet Airways: reports cash running out

Sat Nov 03, 2018 9:15 pm

lightsaber wrote:
. If the current owner wouldn't let EY restructure...


Lightsaber


Can u elaborate?
 
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lightsaber
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Re: Jet Airways: reports cash running out

Sat Nov 03, 2018 9:37 pm

vadodara wrote:
lightsaber wrote:
. If the current owner wouldn't let EY restructure...


Lightsaber


Can u elaborate?

Mostly their purchase of almost a quarter of the airline resulted in zero cost cutting efforts. Jet was hurting for years and the fact I cannot point to significant restructuring after the initial EY investment tells us the current management is resistant to change.

Then there is just cash infusion (FF miles purchased in bulk is how I interpret):
https://www.businesstraveller.com/busin ... t-airways/

In my opinion, that means anyone trying to turn around Jet must receive majority ownership to effect any change.

Can you tell me of major cost cutting efforts at Jet? About all the EY investment did is re-route connections to AbuDhabi. In other airlines EY invested in, they at least tried to cut costs with... in general poor results. Minority investment only works if:
1. The current business is reforming
2. The minority investment directs a business effort to benefit the investor.

EY received #2, but not #1.

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dtw2hyd
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Re: Jet Airways: reports cash running out

Sat Nov 03, 2018 10:48 pm

So, a $300 Million equity infusion in 2013 should magically fix a capital heavy business forever. Give me a break.

What EY or SIA or anyone in future planning to invest in Indian carrier underestimate is how difficult to get working capital in India.
EY wants to give $35 Million, but there is no legal avenue.

World's largest international airline cannot be built with $10 Million equity just like a multi $$Billion real estate enterprise cannot be built with $1 Million loan from father. Both are fantasy stories.
 
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unrave
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Re: Jet Airways: reports cash running out

Sat Nov 03, 2018 11:19 pm

dtw2hyd wrote:
EY wants to give $35 Million,.


Did you just make that number up?
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lightsaber
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Re: Jet Airways: reports cash running out

Sat Nov 03, 2018 11:31 pm

unrave wrote:
dtw2hyd wrote:
EY wants to give $35 Million,.


Did you just make that number up?

See my prior link, they are buying FF miles. In other words, Jet gets money today in return for future flights. A presale.

Not exactly a give, more on forward paying.

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Re: Jet Airways: reports cash running out

Sat Nov 03, 2018 11:36 pm

lightsaber wrote:
Mostly their purchase of almost a quarter of the airline resulted in zero cost cutting efforts. Jet was hurting for years and the fact I cannot point to significant restructuring after the initial EY investment tells us the current management is resistant to change.


Lightsaber


Couldnt agree more. The rationale behind EY investment was to route long-haul thru Abu Dhabi. Let EY do the heavy 'capital' lifting whine 9W focuses on funneling long haul thru Abu Dhabi. Unfortunately, there are too many ego's in 9W. They (along with many posters here) saw this as benefitting EY but not 9W.

Except for a few non-stops to Europe like LHR and possibly a CDG/FRA/AMS, 9W could have moved their entire wide-body fleet to Abu Dhabi and focused on a single aircraft type to drive scale.

Even worse is to have your largest investor not benefitting from the investment, i.e. airline loosing money, not funneling pax, while the company you just bailed out found a new friends in DL/KLM.

Question to be seen, was this friendship with benefits?
 
dtw2hyd
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Re: Jet Airways: reports cash running out

Sun Nov 04, 2018 12:18 am

vadodara wrote:
lightsaber wrote:
Mostly their purchase of almost a quarter of the airline resulted in zero cost cutting efforts. Jet was hurting for years and the fact I cannot point to significant restructuring after the initial EY investment tells us the current management is resistant to change.


Lightsaber


Couldnt agree more. The rationale behind EY investment was to route long-haul thru Abu Dhabi. Let EY do the heavy 'capital' lifting whine 9W focuses on funneling long haul thru Abu Dhabi. Unfortunately, there are too many ego's in 9W. They (along with many posters here) saw this as benefitting EY but not 9W.

Except for a few non-stops to Europe like LHR and possibly a CDG/FRA/AMS, 9W could have moved their entire wide-body fleet to Abu Dhabi and focused on a single aircraft type to drive scale.

Even worse is to have your largest investor not benefitting from the investment, i.e. airline loosing money, not funneling pax, while the company you just bailed out found a new friends in DL/KLM.

Question to be seen, was this friendship with benefits?


9W is a 100 plane airline. They just need 20 NBs and a couple WBs to be a pure AUH feeder, even feeding all to one bank.

Their dilemma is what to do with rest of capacity after a fourth of the fleet does a round trip to AUH.
 
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unrave
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Re: Jet Airways: reports cash running out

Sun Nov 04, 2018 12:52 am

Their dilemma right now is figuring how to avoid becoming a zero plane airline, which will happen unless they find a white knight from heaven
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vadodara
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Re: Jet Airways: reports cash running out

Sun Nov 04, 2018 2:45 am

dtw2hyd wrote:
vadodara wrote:
Except for a few non-stops to Europe like LHR and possibly a CDG/FRA/AMS, 9W could have moved their entire wide-body fleet to Abu Dhabi and focused on a single aircraft type to drive scale.

Even worse is to have your largest investor not benefitting from the investment, i.e. airline loosing money, not funneling pax, while the company you just bailed out found a new friends in DL/KLM.

Question to be seen, was this friendship with benefits?


9W is a 100 plane airline. They just need 20 NBs and a couple WBs to be a pure AUH feeder, even feeding all to one bank.

Their dilemma is what to do with rest of capacity after a fourth of the fleet does a round trip to AUH.


Their dilemma should be to make money first; if not their 100 aircraft fleet will become nada.
 
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Re: Jet Airways: reports cash running out

Sun Nov 04, 2018 4:31 am

Here is the thing, people hated transiting thru AUH, despite US pre-clearance facility (which my father who used it once called a jail before boarding). The plan had a big flaw and they should have addressed that before all the funneling.
 
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Re: Jet Airways: reports cash running out

Sun Nov 04, 2018 12:30 pm

lightsaber wrote:
Can you tell me of major cost cutting efforts at Jet? About all the EY investment did is re-route connections to AbuDhabi. In other airlines EY invested in, they at least tried to cut costs with... in general poor results.


From a pax perspective, if it counts:

1. A massive dilution of the JP programme around August 2016.
2. Introduction of the Fare Classes option in 2016 - 2017.
3. Skimping on meals across the board.
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AI
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Re: Jet Airways: reports cash running out

Sun Nov 04, 2018 4:23 pm

It’s just over 4 hrs 30 minutes before the departure of 9W’s inaugural flight to Manchester.
With all the financial issues, staff leaving, unpaid salaries etc etc do we know if this is definitely going ahead?
Are there any ceremonies, fanfare at the gate etc planned as is done for new routes?
I hope someone from the Indian aviation scene posts some pictures here.
 
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Re: Jet Airways: reports cash running out

Sun Nov 04, 2018 4:29 pm

vadodara wrote:
lightsaber wrote:
Mostly their purchase of almost a quarter of the airline resulted in zero cost cutting efforts. Jet was hurting for years and the fact I cannot point to significant restructuring after the initial EY investment tells us the current management is resistant to change.


Lightsaber


Couldnt agree more. The rationale behind EY investment was to route long-haul thru Abu Dhabi. Let EY do the heavy 'capital' lifting whine 9W focuses on funneling long haul thru Abu Dhabi. Unfortunately, there are too many ego's in 9W. They (along with many posters here) saw this as benefitting EY but not 9W.

Except for a few non-stops to Europe like LHR and possibly a CDG/FRA/AMS, 9W could have moved their entire wide-body fleet to Abu Dhabi and focused on a single aircraft type to drive scale.

Even worse is to have your largest investor not benefitting from the investment, i.e. airline loosing money, not funneling pax, while the company you just bailed out found a new friends in DL/KLM.

Question to be seen, was this friendship with benefits?


Sorry but the market resoundly said they didn’t want to connect through AUH. Contrary to what many on this forum feel, a good chunk of the traveling public “In india” and “to india” wants to avoid the ME. Forcing people to fly through AUH, especially to high O&D markets, was a very flawed strategy. EY should have developed 9W’s network and then used AUH hub to offer more choice to Indian travelers. But once again an airline thought they could force Indian pax to fly at ridiculous times and deal with crap. What ever we might think about AI, their nonstops are popular and India deserves to be connected to the world and not just DXB, DOH & AUH.
 
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Re: Jet Airways: reports cash running out

Sun Nov 04, 2018 6:27 pm

EK wouldn't be the second largest international airline in India if so many people wanted to avoid the ME
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CaliguyNYC
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Re: Jet Airways: reports cash running out

Sun Nov 04, 2018 7:17 pm

unrave wrote:
EK wouldn't be the second largest international airline in India if so many people wanted to avoid the ME


Agreed that is why I said a good chunk doesn’t want to connect there. EK owns the one stop via the ME crowd. For those that don’t want that or prefer nonstops, AUH wasn’t the golden option. 9W needs a strategic investor that knows how to operate an airline efficiently and can truely partner with 9W to build proper network. EY wanted 9W to just blindly drop people in AUH. Dumb strategy which was very short sited.
 
vadodara
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Re: Jet Airways: reports cash running out

Sun Nov 04, 2018 9:30 pm

CaliguyNYC wrote:
unrave wrote:
EK wouldn't be the second largest international airline in India if so many people wanted to avoid the ME


Agreed that is why I said a good chunk doesn’t want to connect there. EK owns the one stop via the ME crowd. For those that don’t want that or prefer nonstops, AUH wasn’t the golden option. 9W needs a strategic investor that knows how to operate an airline efficiently and can truely partner with 9W to build proper network. EY wanted 9W to just blindly drop people in AUH. Dumb strategy which was very short sited.


Unfortunately it was NG that asked for cash from EY. Should have thought about that before asking for money. Perhaps he confused EY with State Bank of India.

Having said that, if flying thru ME hub was unpopular, why are Indian carriers blocking the bilateral capacity increases? If secondary and tertiary cities want ME3 services, let them be.
 
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lightsaber
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Re: Jet Airways: reports cash running out

Mon Nov 05, 2018 3:23 am

When do we hear about the turn around strategy? I see reaction, but not strategy. If you are going to downsize, do it at once and let the surviving staff know they have jobs. Otherwise it is just waiting for the next round of cuts. It is wondering if you should jump ship (assuming a job is open).

vadodara wrote:
CaliguyNYC wrote:
unrave wrote:
EK wouldn't be the second largest international airline in India if so many people wanted to avoid the ME


Agreed that is why I said a good chunk doesn’t want to connect there. EK owns the one stop via the ME crowd. For those that don’t want that or prefer nonstops, AUH wasn’t the golden option. 9W needs a strategic investor that knows how to operate an airline efficiently and can truely partner with 9W to build proper network. EY wanted 9W to just blindly drop people in AUH. Dumb strategy which was very short sited.


Unfortunately it was NG that asked for cash from EY. Should have thought about that before asking for money. Perhaps he confused EY with State Bank of India.

Having said that, if flying thru ME hub was unpopular, why are Indian carriers blocking the bilateral capacity increases? If secondary and tertiary cities want ME3 services, let them be.

Secondary and tertiary markets will always have to hub. Often bridge hub (2-stop) or even 3-stop (ugh...). The disadvantage for Indian airlines is that 30% fuel tax which really ads up on long flights. Since for really long haul (e.g., to North America) fuel will be half the cost of the flight (give or take). Adding ~15% to the cost of the flight makes it tough to compete. Hence the AUH hub for 9W made some sense. But there should have been a constructive hub bypass strategy for the long run.

To have a great hub requires good international to international connections. For example, BKK, HKT, and DPS are popular with tourists. They should be on an Indian hub's routemap. But to connect requires either Mumbai or Delhi so there is enough O&D to sustain the route profitably. Alas, discussing a great Indian hub quickly goes off topic as 9W just isn't ready at this point.

I'm curious how they plan to become profitable again (cost cutting as well as revenue enhancement).


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Antarius
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Re: Jet Airways: reports cash running out

Mon Nov 05, 2018 5:01 am

CaliguyNYC wrote:
unrave wrote:
EK wouldn't be the second largest international airline in India if so many people wanted to avoid the ME


Agreed that is why I said a good chunk doesn’t want to connect there. EK owns the one stop via the ME crowd. For those that don’t want that or prefer nonstops, AUH wasn’t the golden option. 9W needs a strategic investor that knows how to operate an airline efficiently and can truely partner with 9W to build proper network. EY wanted 9W to just blindly drop people in AUH. Dumb strategy which was very short sited.


Other than those in BOM and DEL, it's a 1 stop connection anyways. Why not connect in DOH or DXB? Its practically next door.

The issue isnt the ME. EK is still popular and 9W's AUH strategy flopped - both mutually compatible things. The issue was EY and AUH.
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Re: Jet Airways: reports cash running out

Mon Nov 05, 2018 10:02 am

Jet Airways soars 8% on report of Tata Group, co initiating second round of talks
https://www.moneycontrol.com/news/business/markets/jet-airways-soars-8-on-report-of-tata-group-co-initiating-second-round-of-talks-3131421.html

Seems like some progress, with only so few options left for NG.
 
Candid76
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Re: Jet Airways: reports cash running out

Mon Nov 05, 2018 11:35 am

This morning's inaugural Manchester to Mumbai flight certainly did operate as I watched it depart! It was VT-JWP
 
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Re: Jet Airways: reports cash running out

Mon Nov 05, 2018 12:18 pm

avier wrote:
Jet Airways soars 8% on report of Tata Group, co initiating second round of talks
https://www.moneycontrol.com/news/business/markets/jet-airways-soars-8-on-report-of-tata-group-co-initiating-second-round-of-talks-3131421.html

Seems like some progress, with only so few options left for NG.


NG cannot sell what he doesn't own, TATAs cannot buy with the money they don't have.

But the news story is rerun twice a week with some exciting change or perceived progress.
 
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unrave
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Re: Jet Airways: reports cash running out

Mon Nov 05, 2018 12:22 pm

Did Amreekan news media report NG selling 24% to EY in 2013?
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dtw2hyd
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Re: Jet Airways: reports cash running out

Mon Nov 05, 2018 1:05 pm

This is not AI and 16 ministries. Two people from the private sector. Shouldn't take more than a couple of weeks to decide either way.

If TATAs have money Sanjiv Kapoor is always waiting for the check from owners or any prospective investor. Poor guy waited two years at SG for money, joined UK, still no money.
 
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unrave
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Re: Jet Airways: reports cash running out

Mon Nov 05, 2018 1:31 pm

dtw2hyd wrote:
Shouldn't take more than a couple of weeks to decide either way.


You clearly don't know how M&A negotiations work, do you?
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Re: Jet Airways: reports cash running out

Mon Nov 05, 2018 5:09 pm

lightsaber wrote:
Secondary and tertiary markets will always have to hub. Often bridge hub (2-stop) or even 3-stop (ugh...).

To have a great hub requires good international to international connections. For example, BKK, HKT, and DPS are popular with tourists. They should be on an Indian hub's routemap. But to connect requires either Mumbai or Delhi so there is enough O&D to sustain the route profitably. Alas, discussing a great Indian hub quickly goes off topic as 9W just isn't ready at this point.

I'm curious how they plan to become profitable again (cost cutting as well as revenue enhancement).


Lightsaber


Yes, there are lots of disadvantages for aviation in India. At the same time, there are others such as Singapore and Dubai that invested in aviation as a part of survival strategy for them.

Now one could argue reduce the tax burden on airlines. Those arguing should suggest where the corresponding tax burden should be increased. After-all, it is a zero sum game.

At anyrate, why hold rest of India hostage to the vagaries of AI/9W and BOM/DEL? If ME3 are subsidizing Indian travellers to the world, so be it.
 
dtw2hyd
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Re: Jet Airways: reports cash running out

Mon Nov 05, 2018 5:20 pm

Travel patterns of Indians are different from Americans. So the traditional American hub/superhub model will not work in India.

In America you can forcefully funnel millions through a handful of hubs, pax will put up with those, however congested they are.

Do the same in India, passengers will skip the stop within the country for international travel.

The pecking order of an Indian passenger is their own City, Dubai, and an American City. Very difficult to promote a hub, particularly congested ones.
 
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Re: Jet Airways: reports cash running out

Mon Nov 05, 2018 5:29 pm

unrave wrote:
dtw2hyd wrote:
Shouldn't take more than a couple of weeks to decide either way.


You clearly don't know how M&A negotiations work, do you?

One friend and his father specialize in acquisition negotiations. The faster the negotiations, the better the price the team that can wait receives. So if Jet must sell fast, existing stockholders lose out.

As others already noted, Tata must line up financing. The quicker that is arranged, the worse the loan terms (e.g., the higher the interest and the greater portion of the existing company put up as collateral).

This is a dance where the first offers are poor. When a bonus that will change your life is on the line, you had better believe negotiators look out for #1.

Jet should never have let themselves get into the current poor negotiating position. Due diligence must be done.

Compare to the AI sale attempt. After due diligence, no bidder could justify the risk. Whomever bids knows AI will survive and thus take some traffic. They need to look into the benefits that buying into a large ongoing operation brings. Bit just as the AI investigation uncovered more debt, so will deep diving into Jet (or at least differed maintenance, salary, fuel, and lease payments).
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.
 
smartplane
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Re: Jet Airways: reports cash running out

Mon Nov 05, 2018 6:34 pm

lightsaber wrote:
unrave wrote:
dtw2hyd wrote:
Shouldn't take more than a couple of weeks to decide either way.


You clearly don't know how M&A negotiations work, do you?

One friend and his father specialize in acquisition negotiations. The faster the negotiations, the better the price the team that can wait receives. So if Jet must sell fast, existing stockholders lose out.

As others already noted, Tata must line up financing. The quicker that is arranged, the worse the loan terms (e.g., the higher the interest and the greater portion of the existing company put up as collateral).

This is a dance where the first offers are poor. When a bonus that will change your life is on the line, you had better believe negotiators look out for #1.

Notwithstanding due diligence, you are describing US financiers, who are generally passive. If you want funding quickly, the answer is NO. In the rest of the World, financiers are more proactive. Instances where conditional credit committee / Board approval of funding, even before approaching the customer, though plays havoc with ratios and legal department.
 
vadodara
Topic Author
Posts: 664
Joined: Mon Feb 20, 2017 7:45 pm

Re: Jet Airways: reports cash running out

Mon Nov 05, 2018 7:11 pm

The assumption here is that NG is willing to sell his 51%.

No one will put a $/€/Rupee if NG is ultimately control the value of their investment. Ask EY.

It would be naive to assume that either of Tatas or DL did not line up investment before expressing interest.

If anything, the climate favors the bidder with all parties including NG, lessors, banks etc finding their value of underlying investment dropping in value as this drags along.
 
dtw2hyd
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Joined: Wed Jan 09, 2013 12:11 pm

Re: Jet Airways: reports cash running out

Mon Nov 05, 2018 7:32 pm

Other than slots and trained crew, most of the 9W assets are worthless.

I would guess most of the leases are on extensions, just lessors leeching more money out of 9W.

Few owned aviation assets also old, better to get rid of them.

I think 50xMAX and 15x789s is the perfect fleet mix for 9W.
 
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lightsaber
Moderator
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Re: Jet Airways: reports cash running out

Mon Nov 05, 2018 10:25 pm

dtw2hyd wrote:
I think 50xMAX and 15x789s is the perfect fleet mix for 9W.

That I can agree with.

The value of 9W as an opperating business is approach marginal for:
1. Pilots
2. Gates/slots

And ... Soon off the ground handling.

I wish them well. They are bankrupt by any measure I understand.

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.
 
CaliguyNYC
Posts: 458
Joined: Tue Sep 27, 2016 7:27 pm

Re: Jet Airways: reports cash running out

Tue Nov 06, 2018 2:12 am

dtw2hyd wrote:
Travel patterns of Indians are different from Americans. So the traditional American hub/superhub model will not work in India.

In America you can forcefully funnel millions through a handful of hubs, pax will put up with those, however congested they are.

Do the same in India, passengers will skip the stop within the country for international travel.

The pecking order of an Indian passenger is their own City, Dubai, and an American City. Very difficult to promote a hub, particularly congested ones.


While I don’t doubt that some pax agree with your ranking, One stops through the ME do not see a price premium of any meaningful amount. In fact the ME3 have been offering quite low prices. If connecting in India is so unpopular, I struggle to explain what AI has accomplished with their DEL hub despite being a crap airline.
 
dtw2hyd
Posts: 6171
Joined: Wed Jan 09, 2013 12:11 pm

Re: Jet Airways: reports cash running out

Tue Nov 06, 2018 1:26 pm

CaliguyNYC wrote:
...
While I don’t doubt that some pax agree with your ranking, One stops through the ME do not see a price premium of any meaningful amount. In fact the ME3 have been offering quite low prices. If connecting in India is so unpopular, I struggle to explain what AI has accomplished with their DEL hub despite being a crap airline.


Don't get me wrong, those non-stops are very popular if you are heading to NYC, ORD, SFO or IAD. What about the rest of the USA.

Can AI operate DEL- 12 US stations? No
Can DL operate ATL - 6 Indian stations?. No
Any other option is a 2-stop to the majority of travellers and ME3 has an upper hand. One-stop 24 hr journey always beats two-stop 30+ hr journey.
 
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binayak
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Re: Jet Airways: reports cash running out

Tue Nov 06, 2018 1:54 pm

dtw2hyd wrote:
Don't get me wrong, those non-stops are very popular if you are heading to NYC, ORD, SFO or IAD. What about the rest of the USA.

Can AI operate DEL- 12 US stations? No
Can DL operate ATL - 6 Indian stations?. No
Any other option is a 2-stop to the majority of travellers and ME3 has an upper hand. One-stop 24 hr journey always beats two-stop 30+ hr journey.


I feel AI could've flown to 10 US destinations if it had the appropriate aircraft . They needed 789s . 77L/77W are too big for few markets. Well that's a different story now.
Once we have a proper hub in India which can connect 30+ Indian cities to 9-10 US cities with flights timed such that no one has to leave home at 3am, ME3 will definitely lose market share significantly.
The best preparation for tomorrow is doing your best today
 
sibibom
Posts: 181
Joined: Fri Aug 12, 2016 7:04 am

Re: Jet Airways: reports cash running out

Tue Nov 06, 2018 2:00 pm

binayak wrote:
dtw2hyd wrote:
Don't get me wrong, those non-stops are very popular if you are heading to NYC, ORD, SFO or IAD. What about the rest of the USA.

Can AI operate DEL- 12 US stations? No
Can DL operate ATL - 6 Indian stations?. No
Any other option is a 2-stop to the majority of travellers and ME3 has an upper hand. One-stop 24 hr journey always beats two-stop 30+ hr journey.


I feel AI could've flown to 10 US destinations if it had the appropriate aircraft . They needed 789s . 77L/77W are too big for few markets. Well that's a different story now.
Once we have a proper hub in India which can connect 30+ Indian cities to 9-10 US cities with flights timed such that no one has to leave home at 3am, ME3 will definitely lose market share significantly.


Sadly don't think B787-9 has the range to do anything other than the northeastern US with AI's configuration. A 278-280TN A350-900, on the other hand, will do wonders for AI, considering their B777 are still 9 abreast and frankly no match to some of the densified cabins out there.
 
CaliguyNYC
Posts: 458
Joined: Tue Sep 27, 2016 7:27 pm

Re: Jet Airways: reports cash running out

Tue Nov 06, 2018 2:14 pm

lightsaber wrote:
dtw2hyd wrote:
I think 50xMAX and 15x789s is the perfect fleet mix for 9W.

That I can agree with.

The value of 9W as an opperating business is approach marginal for:
1. Pilots
2. Gates/slots

And ... Soon off the ground handling.

I wish them well. They are bankrupt by any measure I understand.

Lightsaber


So while I have never handled aviation, as a former investment banker and current corp dev / M&A professional, you all are not capturing how valuation works. Businesses are not just valued on their real assets and their profits. Those are just one component. Their cashflows also matter. As an example look at digital companies like Netflix that lose a ton of money but have high valuations. In the 9W case, a purchaser is basically saying I think we can take what 9W has currently built (be it routes, corp contracts, slots, planes, staff, etc) and operate it better and make $XX. They forecast their profits over 10 years, discount it back to get the value of those cashflows. Then using what ever return they want, they determine the price they will pay. 9W is doing the same thing. In the end the purchaser wants to keep as much of the upside they will make for managing 9W better, and 9W is trying to take as much of the upside that someone else can make with their assets. I think there is very real value here. Both DL and Tatas know how much they would have to invest to get an airline to the level of 9W. DL also knows the synergies they bring to airlines they invest in as well as the benefits 9W would have to the DL network (yes even what DL would make off of 9W feed is counted in DL's valuation). Let's see, but trust me value is much more than what you all are focusing on.
 
avier
Posts: 108
Joined: Tue Aug 07, 2018 12:38 pm

Re: Jet Airways: reports cash running out

Tue Nov 06, 2018 2:22 pm

Both AI and 9W have made poor fleet planning choices. 9W for their WB's and AI for their entire fleet. Because of which they struggle to make Int'l routes work either due to cost or capability. 789's/787-10's ( or even A350's for AI) are perfect for both carriers to make their Int'l routes work. An eg. is Air Canada, that could make India work after they got their 789's.

Had they got those, then the world would have been their oyster.
 
avier
Posts: 108
Joined: Tue Aug 07, 2018 12:38 pm

Re: Jet Airways: reports cash running out

Tue Nov 06, 2018 2:32 pm

CaliguyNYC wrote:
Let's see, but trust me value is much more than what you all are focusing on.


Exactly.

Most on here look at value as just face value. Like slots, assets, precious manpower, etc. However there's unseen value, like the the stuff mentioned by you of benefiting DL or even the TATA's realising the difficulty of getting an airline up to the size, scale and level to 9W's. And with an airline like 6E now in the market, they probably will never let any airline get to that size and scale. And this is well understood by 9W's suitors.
 
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lightsaber
Moderator
Posts: 15616
Joined: Wed Jan 19, 2005 10:55 pm

Re: Jet Airways: reports cash running out

Tue Nov 06, 2018 2:47 pm

CaliguyNYC wrote:
lightsaber wrote:
dtw2hyd wrote:
I think 50xMAX and 15x789s is the perfect fleet mix for 9W.

That I can agree with.

The value of 9W as an opperating business is approach marginal for:
1. Pilots
2. Gates/slots

And ... Soon off the ground handling.

I wish them well. They are bankrupt by any measure I understand.

Lightsaber


So while I have never handled aviation, as a former investment banker and current corp dev / M&A professional, you all are not capturing how valuation works. Businesses are not just valued on their real assets and their profits. Those are just one component. Their cashflows also matter. As an example look at digital companies like Netflix that lose a ton of money but have high valuations. In the 9W case, a purchaser is basically saying I think we can take what 9W has currently built (be it routes, corp contracts, slots, planes, staff, etc) and operate it better and make $XX. They forecast their profits over 10 years, discount it back to get the value of those cashflows. Then using what ever return they want, they determine the price they will pay. 9W is doing the same thing. In the end the purchaser wants to keep as much of the upside they will make for managing 9W better, and 9W is trying to take as much of the upside that someone else can make with their assets. I think there is very real value here. Both DL and Tatas know how much they would have to invest to get an airline to the level of 9W. DL also knows the synergies they bring to airlines they invest in as well as the benefits 9W would have to the DL network (yes even what DL would make off of 9W feed is counted in DL's valuation). Let's see, but trust me value is much more than what you all are focusing on.

Yes, DL or another network carrier will find more value. My point is that value can only be extracted if current management is out of the picture.
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.
 
vadodara
Topic Author
Posts: 664
Joined: Mon Feb 20, 2017 7:45 pm

Re: Jet Airways: reports cash running out

Tue Nov 06, 2018 6:31 pm

lightsaber wrote:
CaliguyNYC wrote:
lightsaber wrote:
That I can agree with.

The value of 9W as an opperating business is approach marginal for:
1. Pilots
2. Gates/slots

And ... Soon off the ground handling.

I wish them well. They are bankrupt by any measure I understand.

Lightsaber


So while I have never handled aviation, as a former investment banker and current corp dev / M&A professional, you all are not capturing how valuation works. Businesses are not just valued on their real assets and their profits. Those are just one component. Their cashflows also matter. As an example look at digital companies like Netflix that lose a ton of money but have high valuations. In the 9W case, a purchaser is basically saying I think we can take what 9W has currently built (be it routes, corp contracts, slots, planes, staff, etc) and operate it better and make $XX. They forecast their profits over 10 years, discount it back to get the value of those cashflows. Then using what ever return they want, they determine the price they will pay. 9W is doing the same thing. In the end the purchaser wants to keep as much of the upside they will make for managing 9W better, and 9W is trying to take as much of the upside that someone else can make with their assets. I think there is very real value here. Both DL and Tatas know how much they would have to invest to get an airline to the level of 9W. DL also knows the synergies they bring to airlines they invest in as well as the benefits 9W would have to the DL network (yes even what DL would make off of 9W feed is counted in DL's valuation). Let's see, but trust me value is much more than what you all are focusing on.

Yes, DL or another network carrier will find more value. My point is that value can only be extracted if current management is out of the picture.

Value like beauty is in the eye of the beholder.

Tatas see a chance to regain aviation in their home turf.
DL probably sees this as a way to run more spokes from AMS and possibly CDG. No way DL flies nonstops from most US cities except for JFK and possibly ATL.

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