The board of Jet Airways at its meeting on Thursday is understood to have cleared a proposal to raise $150 million as soft loan, with its Abu Dhabi partner Etihad Airways standing as a guarantor. It is also understood that Etihad will help the struggling airline to get banks that can fast-track this funding as the Indian banks are cautious with regard to giving further loans to the carrier.
Sources said the arrangement is an interim one till both Jet and Etihad are able to agree to terms for a larger equity partnership by the latter, which takes its stake from the current 24% to 49%. “The main issue that is a hurdle in getting a deal between Jet and Etiahd through is of control that Goyal is not willing to let go of,” said a source aware of the development.
When contacted, an Etihad spokesperson said the company does not comment on rumour or speculation.
This is not the first time that Etihad has come to the rescue of Jet Airways as the airline struggles to keep operations afloat. Way back in 2013, when the airline had invested Rs 2,060 crore in Jet Airways to pick up a 24% stake, it helped Jet raise capital off shore (for which Jet had to seek nod from the central bank), besides buying into its three pair of slots at Heathrow Airport for $70 million. In 2014, Etihad had picked up a majority stake in its flier mile programme and paid over Rs 900 crore for a 50.1% stake in the JetPrivilege programme.
Earlier this year, Jet received around Rs 258 crore for JetPrivilege, its customer loyalty programme, from Etihad for advanced ticket sales.
Jet was also in discussion with the Tata Group that owns two airlines , budget carrier AirAsia and full service airline Vistara for a possible share-swap agreement hinging on Goyal exiting the airline completely.
Jet Airways has losses of Rs 8,411 crore and accumulated losses of Rs 10,772 crore till FY18 with another reported losses of `2,620.46 crore till the first half of FY19. Its other liabilities stack up to Rs 11,000 crore.