Etihad is in the process of making a bid for Jet Airways. Now, Jet Airways has reportedly approached the Indian Hinduja Group, proposing that they join the bid.
Jet Airways was forced to suspend flights a month ago following a lack of liquidity. This meant that the carrier was unable to pay for essential services such as aircraft fuel. That’s not to mention the backlog of staff wages and lease payments outstanding. Etihad has interest in Jet Airways, as the Etihad Group owns the Jet Privilege scheme. However, their bid in Jet Airways is conditional on not being the only investing party.
The fall of Jet Airways
By all accounts, Jet Airways was looking fairly stable this time last year. Indeed, the carrier was able to place a huge order for Boeing jets which has since been cancelled. Things clearly weren’t as rosy as they seemed. The airline quickly fell into financial troubles despite their CEO saying reports were not to be believed.
At the turn of the year, things got critical when Jet Airways missed a loan repayment. This was the start of their spiral into unmanageable debt. The airline was unable to pay staff wages, in addition to paying for the aircraft they were using. Eventually, this led to them not being able to pay to fuel their aircraft. We all know that an aircraft with no fuel is not very useful.
Only one bid
Following the suspension of operations by Jet Airways, there was a bidding period for shares in the airline. However, only Etihad was the only investor to place a bid by the deadline. According to Quartz India, four bidders expressed interest, but three didn’t follow through. These parties were:
- Etihad Airways;
- TPG Capital;
- Indigo Partners;
- India’s National Investment and Infrastructure Fund (NIIF).
Indigo Partners previously showed interest in the now-defunct WOW Air. However, a deal never materialised. Despite Etihad’s lack of a formal bid during the initial period, it seems as though they could be interesting.
It’s unsurprising that Etihad appears interested in Jet Airways after all. Indeed, the carrier is a minority partner with the failed Indian carrier. However, it is clear that Etihad has no interest in going it alone. This is why they have approached the Hinduja Group. CH-Aviation reports that the group neither confirmed or denied whether it would join the bid. The publication goes on to mention that “Founders Srichand and GP Hinduja are thought to be the richest people in the United Kingdom with an estimated GBP22 billion pound (USD28 billion) net worth.”
The Hinduja Group could potentially be interested in the bid as they were interested in bidding on the proposed privatisation of both Indian Airlines and Air India. Whatever developments break from the proposed investment, Simple Flying will, of course, keep you up to date.
Do you think the bid will go through? Let us know in the comments!