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

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.


Oil prices rise as faith in supply cuts grows

Updated 26 May 2020

Oil prices rise as faith in supply cuts grows

  • Producers are following through on commitments to cut supplies as fuel demand picks up with coronavirus restrictions easing
  • OPEC+ countries are due to meet again in early June to discuss maintaining their supply cuts to shore up prices

NEW YORK: Oil prices rose on Tuesday, supported by growing confidence that producers are following through on commitments to cut supplies and as fuel demand picks up with coronavirus restrictions easing.
Brent crude futures were up 45 cents, or 1.3%, at $35.98 a barrel by 1:09 p.m. EDT (1709 GMT). US West Texas Intermediate (WTI) crude futures gained 89 cents, or 2.7%, to $34.14.
The Organization of the Petroleum Exporting Countries and other leading oil producers including Russia, a group known as OPEC+, agreed last month to cut their combined output by almost 10 million barrels per day in May-June to shore up prices and demand, which has been hit by the coronavirus pandemic.
Russian Energy Minister Alexander Novak is due to meet oil major producers on Tuesday to discuss the possible extension of the current level of cuts beyond June, sources familiar with the plans told Reuters.
The RIA news agency said Russian oil production volumes were near the country’s target of 8.5 million bpd for May and June.
On Monday, Russia’s energy ministry quoted Novak as saying that a rise in fuel demand should help to cut a global surplus of about 7 million to 12 million bpd by June or July.
OPEC+ countries are due to meet again in early June to discuss maintaining their supply cuts to shore up prices, which are still down about 45% since the start of the year.
“The 16 million bpd oversupply in crude during April could be reversed altogether by June, helped by a 4 million-bpd recovery in crude demand and a 12 million-bpd cut in crude supply,” said Bjornar Tonhaugen, head of oil markets for Rystad Energy.
“OPEC+ is pulling the most weight by far, effectively reducing supply by nearly 9 million bpd while non-OPEC+ crude supply is down by more than 3.5 million bpd from March levels.”
In an indication of lower supply in the future, data from energy services business Baker Hughes showed that the US rig count hit a record low of 318 last week.