Sad day for Indian aviation: SpiceJet chief on developments at Jet Airways

Sad day for Indian aviation: SpiceJet chief on developments at Jet Airways

Sad day for Indian aviation: SpiceJet chief on developments at Jet Airways

Mumbai: Jet Airways' founder and chairman Naresh Goyal and his wife have stepped down from the airline's board as the cash-strapped Indian carrier closes in on a rescue deal led by state-run banks.

At present, Jet Airways is operating with just 41 planes out of its fleet of 119 planes after failing to repay rentals. In the meantime they will nominate two directors to Jet's board.

Jet Airways, its employees both past and present, shareholders, partners, regulators, and most importantly our dear guests, are our family and there is no sacrifice both Anita and I would not make to ensure that the best interests of our Jet Airways family are safely secured.

After weeks of uncertainty over the future of ailing Jet Airways, the airline's board has approved an immediate fund infusion of up to Rs 1,500 crore by lenders as well as conversion of debt into equity.

Saving Jet is crucial for Indian Prime Minister Narendra Modi as he looks to avoid thousands of job losses ahead of a general election.

State Bank of India has reportedly agreed to infuse ₹15 billion into the private carrier.

This is part of the resolution plan put in place by a consortium of domestic lenders led by State Bank of India.

While Jet has been regular on payment to a large part of its workforce, it has been delaying salaries to the senior management people, pilots and engineers since last August.

According to reports, Etihad's stakes in the company will be halved from 24 per cent to 12 per cent while Goyal's stake will be reduced to 25.5 per cent from the existing 51 per cent.

A bidding process will be initiated for new investors, which is expected to be completed in the June quarter.

Goyal and his wife will step down from Jet Airways' board under a resolution plan piloted by its lenders.

"Today is indeed a sad day for Indian aviation", said Ajay Singh, chairman and managing director at rival SpiceJet, adding that Goyal made India proud by launching a "world class" airline.

In a stock market filing which also announced the resignation, the company said that banks would lend around $210m to keep it afloat until it starts to sell shares to new investors.

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