Jet Airways India ltd, the debt ridden airline is hoping for a bailout by the State owned lender, State Bank of India. The bailout plan is one of the last resort for the Jet Airways as the airlines has accumulated huge debt by offering low cost- no frill flights to one of the most cost-conscious consumer, Indian passengers.
According to the people close to the deal Jet Airways is set to get $85 million emergency loan from SBI for its revival. The formal announcement of the deal is expected to be made soon.
The fresh infusion of funds will come as a life saver for Asia’s one of the worst performing airlines, which has defaulted on interest payment for previously taken loans and has even delayed salaries of its employees.
The new loan will be given on the pledged shares by founder and Chairman Naresh Goyal and partner Etihad Airways PJSC. The final decision in this matter is to be approved by the market regulator, securities and Exchange Board of India (SEBI).
If the loan gets approved then this will help the Airline to survive in the cutthroat competition from other budget airlines such as IndiGo and Spice Jet, in the Indian aviation market. Also it will save the jobs of around 23,000 employees working with Jet Airways.