Founder of Jet Airways resigns amid turbulence

Jet Airways is struggling for its survival

Naresh Goyal, founder of India’s Jet Airways, has stepped down as chairman of the company.

His resignation will likely pave the way for potential investors to save the cash-strapped Jet Airways. They were held back by Goyal’s reluctance to give up control of the company, according to a BBC report.

Jet Airways is struggling for its survival

The BBC report also added that Jet Airways ended potential deals with Etihad Airways and interest from Indian conglomerate Tata group, both of which were trying to save the beleaguered carrier. But both companies stepped back when Goyal refused to resign.

Indian media reports indicate that Goyal’s stake in Jet Airways will fall to less than 50 per cent, and he will lose the majority stake to lenders. The statement said it would also issue 11.4 million new shares.

According to Channel NewsAsia, the Mumbai-based carrier is deep in debt of more than US$1 billion, and banks would be injecting up to US$218 million as immediate funding support. Currently, Jet Airways has been struggling to pay aircraft lessors, employees and suppliers.

In recent weeks, India’s oldest airline had grounded more than two-thirds of the 119 aircraft in its fleet. Thousands of customers have also been stranded in recent weeks, after flights were cancelled with little notice.

Within minutes of his resignation, Jet Airway’s shares jumped by around 12 per cent.

Sponsored Post