Etihad Airways, the airline partner flight of Jet Airways has pre- purchased Jet Airways’ ticket amounting to a total of $35 million (₹ 252 crore) via its loyalty programme company Jet Privilege. Some of the funds are infused into the airline.
The tickets will be offered to Jet Privilege members as redemption for their accumulated miles of air travel. Etihad owns 50.1 per cent of Jet Privilege, while the rest is held by Jet. The Abu Dhabi airline owns 24 per cent of Jet.
An Etihad spokesperson said the airline doesn’t comment on “rumours and speculations”.
ET had first reported this on January 23.
Jet had raised an equivalent amount via a similar transaction in October. Going by industry estimates of an immediate need for Rs 3,000 crore, Etihad’s latest infusion is unlikely to help the airline much, given that its loan repayment for this financial year itself is over Rs 1,700 crore.
The airline, facing a grave financial crisis, has defaulted on loan repayments, delayed salaries and lease rental payments, grounded planes and reduced flights.
The airline is currently in discussions with Etihad for an equity infusion. The airline has put forward stringent conditions including a price not more than Rs 150 for each of Jet’s shares. Jet’s lenders are simultaneously working on a resolution programme that may see them converting a part of Jet’s debt into stock. Jet recently made provisions for raising its share capital by 11 times and for debt being converted into preference shares in the company.