APD | Major Indian airline gets cash infusion

By APD writer Rishika Chauhan

NEW DELHI, Mar.26 (APD) -- Jet airways, an important Indian airline, received a cash infusion of 15 billion rupees on Monday, by a consortium of lenders led by the State Bank of India. 

The development is vital, as the airline has been running in the red since the last few years. On Monday, Naresh Goyal the chairman of Jet Airways also stepped down.

As the airline made the announcement, its stock price increased by 12.4%. Jet Airways had previously been unable to pay salaries to its staff including pilots. Consequently, it had to ground about two-thirds of its 119-aircraft fleet.

Speaking about Jet airways being taken over by banks, Union finance minister Arun Jaitley said, “The self-interest of the banking system is that the company must survive so that their investment remains and when it prospers they can get back their monies.”

“They have kept public interest in mind because India needs more airlines, more aircraft. Creditors have kept both these considerations in mind,” he further said.

Meanwhile, some experts are also arguing that the decision of the government to not allow the banks to take over is a political one as the elections are near.

The bailout has made it possible for many people to keep their jobs and checked resentment against the government.

The airlines in India have been facing a financial crisis and incurring losses since the past few years. 

Besides Jet airways, other airways like Spice Jet have shared their apprehensions about the adverse effect of government policies on the sector.

(ASIA PACIFIC DAILY)