No Bidders For Jet Airways

It is already two weeks since Jet Airways was forced to end the few flights it was still operating as there was no cash left.

The airline that once was the pinnacle of Indian aviation operated 120 planes at the end of 2018 before lessors started to repossess aircraft due to non-payment of leases.

Indian media is now reporting that there doesn’t appear to be any bidders for the airline and the deadline of submitting binding offers May 10 is soon approaching.

Here’s an excerpt from Business Day (access their piece here):

Jet, saddled with roughly $1.2bn in bank debt, and SBI did not respond to requests for comment.

Earlier on Thursday, The Economic Times, citing sources, reported that three of the four qualified bidders — Etihad Airways, TPG Capital and Indigo Partners — had not signed the nondisclosure agreements necessary for conducting due diligence.

Sources said that Jet’s lenders had not yet made a decision on whether to push for bankruptcy, but industry experts said dragging the airline through bankruptcy court might be counterproductive.

“If there are no bidders through this process, then the airline will shut,” said analyst Vijayant Gupta of Edelweiss Securities. “Lenders have no incentive to take Jet to the bankruptcy court because there are no hard assets to liquidate.”

Conclusion

Why would anyone bid for an airline remains that has $1.2B in debt? Cannot remember an airline that would have started to fly again (in the recent past) after shutting down operations like Jet Airways here has done.

Many airlines are no longer honoring award tickets issued on Jet Airways  stock, although Jet Privilege is owned by Etihad. I would assume that Jet Privilege will follow the same path as TopBonus, also owned by Etihad, that attempted to trade for a short while after Airberlin collapsed only shutting down the shop few weeks later.

It seems that Etihad is not willing to fund these peripheral operations after losing billions on its Etihad Equity Partner adventure with now mostly bankrupt airlines (Airberlin, Alitalia & Jet)