In a bid to attract buyers, banks ask govt to protect Jet’s prime slots
20/04/2019
new delhi: The lenders’ consortium, led by State Bank of India, has sought protection of prime airport slots of Jet Airways so that the value of the suspended airline does not erode further. In a communication to the Ministry of Civil Aviation, the lenders have made a case for protecting the Jet slots.
"Adequate number of slots at metro airports will be protected by the government. These will only be given temporarily so that adequate number of seats are available,” said a person aware of the development. "The investors and prospective buyers of Jet Airways are aware of this and they will do their due diligence on what they can get and what they cannot," he added. Another source said the lenders had asked the government to retain 40 per cent of Jet Airways' slots at all airports to ensure a new owner can kick-start operations soon after taking over. “The new owner can have concerns about restarting operations if enough slots are not available," he said.
As many as 106 pairs of slots at Mumbai airport and 79 at Delhi airport are primary resources of Jet Airways, and bankers believe these will attract bidders. Airport slots in India are allocated by a slot coordination committee of airport operators, according to the Worldwide Slot Guidelines drawn up by the International Air Transport Association. According to these norms, an airline can keep a given slot from the previous season as long as it has used the slot 80 per cent of the time.
Also, 50 per cent of slots freed up under this “use it or lose it” policy are provided to new airlines and the rest to legacy carriers.
The SBI-led consortium had called for Expressions of Interest to buy a controlling stake (51-75 per cent). Following that, Abu-Dhabi based Etihad Airways, which currently owns a 24 percent stake in the airline, private equity fund TPG Capital, Indigo Partners, and India’s government-owned sovereign fund National Investment and Infrastructure Fund (NIIF) have been shortlisted to bid for the airline.
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