Air India's plans of using Jet Airways' Boeing B777 plans have been shelved. The national carrier is reportedly under the impression that Jet's Boeing B777 planes are commercially unviable given the huge maintenance requirement.
On Monday, an airline executive responding to an IANS story said, "The engineering unit has done the work around the B777s and found no merit in taking them."
A few weeks ago, Air India showed interest in picking up 5 wide-body Boeing 777 aircraft of Jet Airways on dry/wet lease and initiated talks with the crisis-hit airline's lead lender - State Bank of India.
Air India Chairman Ashwani Lohani had in fact discussed a proposal with SBI Chairman Rajnish Kumar. The proposal was aimed at catering to peak demand on various international routes such as India-Gulf and India-UK.
Jet Airways had 10 Boeing 777 in its fleet, which were used to serve various popular destinations in Europe and North America before the entire operations came to a grinding halt.
Surprisingly, the Jet management had been keen on selling B777 planes much before the operations ceased. A senior official from the Finance team of Jet Airways in an interaction with Mint had explained in a Nov'18 story that the company wanted to sell six of the ten B777 planes to raise Rs 1800 crores. Back then, debts were reported at over Rs 8052 crores, and selling 16 wide-body planes of the 124 in fleet had been considered a wise decision to reduce debts.
Selling however was not an easy proposition considering many of Jet's planes had been bought on a sale and leaseback transaction. This type of transaction involves the owner selling the aircraft and leasing it back to the buyer. Such a transaction ensures debts out of the balance sheet for an airline. Although this transaction came at a benefit of a thin balance sheet, many experts have questioned the need to do so. This, considering Jet already had a huge fleet size and managing such a large fleet came at a huge expense.
With the possibility of Air India raising its hands from taking up B777 planes, lead lender SBI may be prompted to throw up a surprise from its hat. And, it seems, the banker does have a plan B for Jet's grounded long-haul planes. An internal Jet Airways mail has revealed that one of the B777 jets was scheduled for maintenance ferry to Hong Kong on May 10.
Is SBI thinking of getting the decks in action for fresh investors or buyers?
Meanwhile, Jet Airways reeling under acute financial stress has put out various of its assets for sale with a view to realise some value. Jet's fleet comprises of 737 Max, Airbus A330, ATRs and Boeing 777. Besides this, various foreign routes too have been put up for sale.
Domestic carriers such as SpiceJet had shown interest in running domestic flights. In fact, SpiceJet last month showed interest to run the India-Dubai sector too. The Civil Aviation ministry had hinted that these rights and slot allocations would be done, although they were temporary for a time period of three months. This, in order to protect the historic rights of Jet Airways.
"These slots would be made available to Jet Airways, as and when they revive their operations, as per the extant guidelines," a ministry statement had said on April 23.
Facing severe financial crisis, Jet Airways had on April 17 announced temporarary suspension of its flight operations. The airline continues to be grounded and its revival depends on fresh fund infusion by investors.
Previously, it had been speculated that government operated Air India might takeover Jet Airways. The move was expected to ensure a revival of Jet Airways and retain the lost jobs. There were a few agencies including several employee associations suggesting that move. More on that here.