Bombay: Etihad Airways, which owns 24% of the capital of Jet Airways India Ltd, announced Thursday that it has proposed a restructuring and financial backing plan for the Mumbai-based airline, which included a pre-purchase payment of $ 35 million in cash to the Jet Airway loyalty program. JPPL (Jet Privilege Private Ltd), majority owned by Etihad Airways.
Etihad Airways, which owns 50.1% of Jet Airways’ frequent flyer program, Jet Privilege Private Ltd, said in a statement Thursday evening that it confirmed it had proposed a plan for financial restructuring and support for Jet Airways which has been approved. by its majority. shareholder.
“This plan includes a $ 35 million cash prepurchase payment to Jet Airways by Jet Privilege, which is majority owned by Etihad Airways,” Etihad Airways said in an emailed statement.
When contacted, Jet Airways said that (Jet Privilege Private Ltd, where it owns 49.9% of the capital) had entered into an agreement to purchase prepaid tickets for $ 35 million with Jet Airways, in the normal course of business.
“JPPL (Jet Privilege Private Ltd) regularly buys these tickets to offer to its members in exchange for miles, so said transaction is no different and is done in the ordinary course of business between Jet Airways and JPPL,” the company said. Aerial.
Rising jet fuel prices and the weakening rupee have inflated operating costs for Indian airlines as the majority of payments are made in dollars.
As the domestic aviation industry faces headwinds, Jet Airways, which is essentially a full-service carrier, also faces stiff competition from low-cost airlines, which operate on a model comparatively lower cost.
Mint had reported on September 28 that Jet Airways had informed lenders that it would raise about ₹ 3,500 crore over the next six months through a sale of a stake in its loyalty program and the injection of fresh funds into the company. The report adds that the airline has also told lenders it will cut costs by as much as ₹ 2000 crore over the next two years.
Jet Airway’s stock closed at ₹ 197.10, one piece, on the Bombay Stock Exchange (BSE) Thursday, up 11.04% from the previous day. The benchmark Sensex closed at 35,169.16, down 2.24% from the previous day.
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