India’s Jet Airways stock falls on report of temporary close

Published: Updated:

Beleaguered Indian airline Jet Airways’ stock fell sharply on Tuesday after its former chairman reportedly withdrew plans to bid for a controlling stake in the company and news media said its flight operations might be temporarily halted.

Naresh Goyal, who founded Jet Airways in 1992 and saw it soar to become India’s largest airline, abandoned plans to bid for a controlling stake as part of a rescue plan led by government-owned State Bank of India, according to Mark Martin, chief executive of aviation consultancy Martin Consulting.

“Somebody has obviously arm-twisted him to withdraw that bid. Who’s orchestrating all this?” Martin said. It was not immediately clear who else might submit a bid for the company. Etihad Aviation Group purchased a 24 percent stake in Jet Airways in 2013.

Also on Tuesday, the BSE stock exchange in Mumbai announced it was seeking clarification from Jet Airways of Indian news reports that the company planned to temporarily shutter its operations.

Jet Airways’ stock was off 7.6 percent at Tuesday’s close. The company “has not reached that stage” of deciding whether to temporarily close down, spokesman Gaurav Sahni said.

The airline reported a net loss in the quarter that ended in December of 5.8 billion rupees, about $83 million. Jet Airways pilots demonstrated in Mumbai on Monday, saying they had not received a salary in four months.

State Bank of India and other creditors have so far been unable to stop the bleeding at Jet Airways, whose fleet of aircraft has dwindled to 14 from 119 on Dec. 31, when the company first defaulted on some of its more than $1 billion in debt.

This week, it reduced its operations to only seven aircraft flying domestic routes. Sahni said international flights, which were set to resume Tuesday, would resume instead on Thursday.