India’s Jet Airways loses two top executives as rescue hopes dim

Jet Airways CEO Vinay Dube speaks at an aviation conference in Mumbai, India, January 16, 2019. — Reuters pic
Jet Airways CEO Vinay Dube speaks at an aviation conference in Mumbai, India, January 16, 2019. — Reuters pic

BENGALURU, May 14 — The chief executive and head of finance at Jet Airways have both quit, the Indian company said today, further eroding hopes of a rescue of the debt-laden carrier that grounded operations last month.

Jet, once the biggest private carrier in the country, owes vast sums to its lessors, employees, fuel suppliers and other parties. It stopped all flights from April 17 after its lenders refused to give it any more funds to keep the carrier flying.

Jet, also saddled with roughly US$1.2 billion (RM5.01 billion) in bank debt, was crippled by mounting losses as it attempted to compete with low-cost rivals Interglobe-owned IndiGo, SpiceJet Ltd and Wadia Group-owned GoAir.

The airline has been rapidly shedding aircraft in recent weeks, as lessors have rushed to deregister and repossess planes in the wake of the turmoil.

It has also lost hundreds of pilots, cabin crew and engineers to rivals and seen its valuable slots reallocated to rivals, further eroding any residual value and hopes of new investors stepping in to rescue the airline.

The departure of Chief Executive Vinay Dube comes hard on the heels of the resignation of Chief Financial Officer Amit Agarwal, announced earlier in the day. Agarwal’s resignation was effective May 13, the company said in a statement.

Separately, the Economic Times newspaper reported today that Jet’s Chief People Officer Rahul Taneja had also resigned. Reuters was unable to confirm the report.

For months, Jet has tried to convince investors, including Etihad, to pump in money and save the airline. But suitors had some qualms and a deadline for any interested parties to submit binding bids for the carrier ended on Friday with no such offers.

State Bank of India (SBI), Jet’s lead lender and the bank overseeing the sale process, said at the time it had only received three conditional offers, including one from Etihad.

“This had to happen,” said analyst Ronil Dalal of Ambit Capital. “Considering the kind of bids that have come in and the monetary value of those bids, it seems like it is too little.”

“It was long expected that Jet will eventually shut down and I think now that’s coming to fruition.”

Jet and SBI did not immediately respond to requests for comment on what options exist for Jet.

In its regulatory filing, the airline said Dube and Agarwal resigned due to personal reasons, without providing further details.

Dube took over as the airline’s CEO in August 2017, filling in a spot that had been vacant since early 2016. Agarwal had been acting as CEO during that time.

Jet’s shares closed 7.33 per cent lower at 128.9 rupees today, while the broader Mumbai market closed 0.66 per cent higher. — Reuters

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