As if taking cues from a Bollywood melodrama, the deadline for any Jet Airways’ rescue plan has been postponed again. The administrators of the failed airline have extended the deadline date to December 16, 2019 – the latest in a series of deadline extensions.
Jet Airways, for a while the largest commercial passenger airline in India, ceased operating in April 2019 amid a perfect storm of cash flow problems and mounting debts. But ever since there has been a reluctance to let the airline fade away.
Most initial expressions of interest have faded away
Various interested parties, pretenders, and tire kickers have proposed resuscitating the airline (now an airline in name only as virtually all its planes have gone). It has made for some headline-grabbing media speculation, but to date, nobody has stepped forward with the resources and financial muscle to rescue the airline.
According to a report in Flight Global, the only party to have lodged an expression of interest (EOI) is Synergy. They have been running the ruler over the Jet Airways’ books and conducting due diligence but have yet to submit a formal rescue bid.
Offshore Indian businessman look but fail to commit
Flight Global suggests Synergy has failed to find a local partner in its rescue bid. Under Indian law, a foreign company cannot hold more than a 49% stage in a local airline. Synergy is reportedly in talks with UK Indian born businessman Ravi Deol.
Mr Deol has been kicking the tires at Jet Airways for some time now. The successful UK businessman has been holding talks with various other interested parties over the last six months but it has come to naught.
As for Synergy, in addition to holding talks with Mr Deol, the South American conglomerate has reportedly held discussions with Bird Group, an Indian aviation management business.
Earlier in the year, there was a professed interest in rescuing Jet Airways from both Etihad and former Jet employees. Back in May 2019, Etihad was the only party to have placed a bid for shares in the airline following its collapse. There were initially four interested parties – TPG Capital, Indigo Partners, and India’s National Investment and Infrastructure Fund in addition to Etihad. But only Etihad followed through.
Disregarding its financial problems, as a foreign airline Etihad faced the same ownership restrictions Synergy faces. Even if it was allowed to, Etihad reportedly had no interest in going it alone with Jet Airways. Etihad’s attempts to find a local partner failed. Perhaps, given its own problems, Etihad didn’t try as hard as it could have, the foreign ownership rule giving the Abu Dhabi based airline a convenient get out of jail card.
The employee rescue bid has come to naught
Then, of course, there was the much-vaunted rescue bid by a group of former employees. In August, Simple Flying reported that an employee consortium had joined forces with the UK’s Adi Group in a joint venture for 75% of Jet Airways.
But both the employee consortium and Adi Group’s owner, Sanjay Viswanathan, would have been required to pony up hundreds of millions of dollars to fund the bid. Their ability to do so was never formally tested. Perhaps unsurprisingly, things have also gone quiet on this front
On one level, the desire to rescue Jet Airways is understandable and even admirable. But if the airline had potential, investors with the experience and resources to harness that potential would have long swooped in. When there is a surefire dollar to be made, equity groups and other businesses are like blowflies on a dead animal carcass. That nobody has swooped in is extremely telling.
Synergy, who have enough problems of their own, have so far failed to commit. Can you see them doing so? Unlikely. So what are Jet Airways’ administrators left to do? Keep calling for bids and extending deadlines? Far better to rule a line under Jet Airways, put it out of its misery, and send it wherever defunct airlines go when they die.