India’s Jet Airways loses two executives as rescue options fade
The CEO and CFO have both quit as only three conditional offers have been received for airline which has been grounded since April 17
Bengaluru — The CEO and head of finance at Jet Airways have both quit, the Indian company said on Tuesday, 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 $1.2bn in bank debt, was crippled by mounting losses as it attempted to compete with low-cost rivals Interglobe-owned IndiGo, SpiceJet 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 re-allocated to rivals, further eroding any residual value and hopes of new investors stepping in to rescue the airline.
The departure of CEO Vinay Dube comes hard on the heels of the resignation of CFO 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 on Tuesday 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% lower at 128.9 rupees on Tuesday, while the broader Mumbai market closed 0.66% higher.