Following Massive Losses, Jet Airways Knocks Reliance And Tata’s Door To Save The Fast Sinking AirlineA Jet Airways plane (Uday Bararia/Wikipedia)

In what appeared to a desperate, last-ditch effort to rescue the fast sinking airline, embattled Jet Airways has reached out to Reliance Industries Ltd (RIL) chairman Mukesh Ambani and chairman emeritus of Tata Group Ratan Tata, Livemint reported.

Jet Airways founder Naresh Goyal, who owns a controlling stake of 51 per cent in the airline, is also looking at an overseas airliner as a potential fundraising source.

As per the report, Tata Group had evinced keen interest in bailing us out the cash-strapped airliner but negotiations reached a stalemate as the conglomerate wanted complete control and insisted Goyal step aside.

Reliance Industries Chairman Mukesh Ambani’s name has also cropped up as a potential suitor for the airline as Goyal is believed to have approached India’s richest businessman in his personal capacity to rescue the financially distressed airliner.

Reliance has so far steadfastly resisted the temptation to make a foray into the aviation sector. There were strong rumours in 2014 that Ambani will come to the rescue of Vijay Mallya owner Kingfisher Airlines but it turned out to be mere speculation.

Jet Airways is in a precarious position. It has suffered two massive and consecutive quarterly losses of Rs 1,036 crore and Rs 1,323 crore in the March and June quarters of this calendar. As at the end of June 2018, Jet’s borrowings are in excess of Rs 9,430 crore, according to a report in The Times of India, placing it in a position similar to what Kingfisher was in 2011.

Jet has also been steadily losing market share in crowded and competitive aviation space. In July 2018, IndiGo’s market share went up from 38.7 per cent to 42.1 per cent, while its three main competitors – Jet, SpiceJet and Air India – lost shares.

Jet’s market share crashed from 18.2 per cent to 15.1 per cent, Air India from 13.5 per cent to 12.4 per cent and SpiceJet from 14.2 per cent to 12.3 per cent. The two small gainers were GoAir (up from 7.8 per cent to 8.9 per cent) and the two Tata joint ventures (AirAsia and Vistara) combined, which rose from 7.2 per cent to 8.7 per cent.

Jet defaulted on payments to aircraft lessors and even delayed salaries several times this year after reporting back-to-back quarterly losses.

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