Etihad, Jet Airways in talks on rescue deal — sources

A Jet Airways plane is parked as another moves to the runway at the Chhatrapati Shivaji International airport in Mumbai, India, February 14, 2018. (REUTERS)
Updated 05 December 2018
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Etihad, Jet Airways in talks on rescue deal — sources

  • India is one of the world’s fastest-growing domestic aviation markets but high fuel prices, a weak rupee and intense price wars in the country

NEW DELHI: Etihad Airways is holding talks with Jet Airways Ltd. and its bankers on a rescue plan for the debt-laden Indian carrier, two sources aware of the matter told Reuters.
Executives from Etihad and Jet have met some of the airline’s bankers in Mumbai in recent days to discuss ways to address its cash flow issues and evaluate the carrier’s future business plan, the sources said.
Etihad, which owns 24 percent stake in Jet Airways, is also considering investing fresh funds in the airline if it can agree on the structure, one of the sources said, adding that no deal has been finalized.
The sources did not want to be named as the discussions are private.
Jet, which is India’s biggest full service carrier by market share, is in desperate need of cash. The 25-year-old airline, founded by Naresh Goyal, owes money to lessors and vendors, has delayed salary payments to pilots and senior executives and is cutting flights on non-profitable routes to save money.
India is one of the world’s fastest-growing domestic aviation markets but high fuel prices, a weak rupee and intense price wars in the country, which is dominated by no-frills airlines like Interglobe Aviation Ltd’s IndiGo, has exacerbated Jet’s woes in recent months.
Etihad has already come to Jet’s rescue once when it picked up a 24 percent stake in the carrier in 2013 but the situation is different this time.
While the Abu Dhabi-based carrier is invested in Jet, it has lost money in other airline ventures such as Alitalia and Air Berlin and may be wary of loosening the purse strings again, said another source.
Also, with tighter lending norms and a liquidity crisis in India, bankers may be hesitant to lend more to the struggling airline.
On Tuesday news channel CNBC-TV18 reported citing sources that Jet is close to finalizing a deal under which Etihad will inject fresh funds in the airline.
Goyal, who is founder and majority shareholder, has assured the airline’s pilot union that the funding, which will likely result in route restructuring and more flights to Abu Dhabi, could take place as early as mid-December, the channel said.
Goyal has also assured pilots that there will be no delays in salary payments from April 1, according to the channel.
Jet and Etihad did not immediately responded to Reuters’ emails seeking comment.


Passenger numbers rise at Dubai International Airport

Updated 10 December 2018
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Passenger numbers rise at Dubai International Airport

  • Operator welcomes monthly jump after travel decline in past year
  • Dubai Airports launched its Strategic Plan 2020 in 2011 with the aim of increasing passenger capacity from 60 million a year to 90 million by 2018

LONDON: The number of passengers passing through Dubai International Airport rose by 2.1 percent in October compared with the same month last year, the operator Dubai Airports said on Monday.

The increase follows a drop in passenger traffic in September and a wider slowdown in the number of travelers passing through the emirate’s airport over the past year.

“Dubai International has been on record stating that passenger growth would be somewhat lower than in previous years, so this current performance is in line with my expectations,” said aviation analyst Saj Ahmad from Strategic Aero Research.

“That said, the airport has still grown over 2017 and will likely eclipse its 2018 target of handling over 90 million passengers and remain the world’s busiest international airport,” he said.

Dubai Airports CEO Paul Griffiths told a conference in Dubai last month that he expected just over 90 million passengers to use the airport this year, according to Reuters.

A total of 7 million passengers used the airport in October, compared with 6.9 million in the same month last year.

In September, passenger traffic fell by 0.2 percent compared with the previous year. The decline was blamed on the Eid Al-Adha holiday — with an associated spike in travel — falling in September last year.

Total passenger traffic in 2017 rose by just 5.5 percent year-on-year to reach 88.24 million people. This is a slower rate of growth than the 7.2 percent increase in 2015-16 and the 10.7 percent jump recorded between 2014-2015.

Dubai Airports launched its Strategic Plan 2020 in 2011 with the aim of increasing passenger capacity from 60 million a year to 90 million by 2018.

Under the strategy, the number of airport stands has been increased and terminal buildings expanded.

As demand grows, further work on the airport’s infrastructure will be needed, said Ahmad.

“Demand is not infinite — the airport is operating at nearly 98 percent capacity, so it stands to reason that only so much growth can be absorbed,” he said.

DXB handled 237,499 tons of cargo in October, a 2.5 percent increase on the previous month. Overall cargo volumes have fallen year-to-date by 0.9 percent to 2.1 million tons.