Jet Airways: JPPL stake sale put on backburner

The stake sale in JPPL, which manages Jet Airways' customer loyalty program Jet Privilege, has been put on the backburner but the airline has identified a potential buyer for its aircraft as part of its resolution plan, a senior company official said Friday.

"We will continue to work on the stake sale in JPPL (Jet Privilege Private Limited) but not immediately and that is why it is not part of the resolution plan," Jet Airways' Chief Financial Officer Amit Agarwal said during a conference call for discussing the third quarter results.

Earlier this month, Jet Airways mopped up Rs 250 crore from advance sale of tickets to Jet Privilege, less than five months after raising money through the same route. Abu Dhabi-based Etihad Airways owns 50.1 per cent in JPPL while 49.9 per cent stake is with Jet Airways.

"As far as the aircraft is concerned, we have identified the potential buyer, both for sale as well as sale-and-leaseback of some of the other aircraft, and we are well on track and that is considered part of the resolution plan which had been approved by the board yesterday," Agarwal added.

Debt-laden Jet Airways board Thursday approved a bank-led provisional resolution plan (BLPRP) which will pave the way for the conversion of the airline's debt into equity, making lenders the largest shareholders in the company.

While talking about the debt situation on Friday, Agarwal said that as on December 31, 2018, the gross debt of the airline was Rs 7,654 crore or USD 1.09 billion dollars, "a reduction of about Rs 750 crore in the quarter as compared to second quarter of FY2019".

"Of this, aircraft debt stands at Rs 1,585 crore, about 60 per cent of the total debt is denominated in US dollars," he added.

Jet Airways Thursday reported a standalone net loss of Rs 587.77 crore for the third quarter ended December 31, owing to higher fuel cost and rupee fall.

Agarwal said Friday that the airline has withdrawn its flights from some international and domestic destinations "as a part of rationalisation process".

"Especially on the ATR side, we have cut down the operations for the simple reason - unprofitable routes. This was because of the higher fuel prices...That has led to the drop in ASKM (Available Seat Kilometres) and therefore the utilisation of the aircraft," he said.

ATR aircraft are used for short-haul flights. ASKM captures the total flight passenger capacity of an airline in kilometers.

Agarwal said that even though some routes have been cancelled, "this does not mean that we have curtailed our growth ambitions". He added that the airline is "still growing and the aircraft that are freed up are being redeployed on other routes".

"We have not lost any of the (airport) slots. We continue to maintain network sanctity...We have clearly the availability to get back at the market share," Agarwal said.