Experts differ on Jet slots’ re-allocation impact on stake sale

New Delhi, April 17 (IANS) Aviation experts are divided on whether the government’s move to allot the now-grounded Jet Airways’ slots to rival domestic carriers would impact buyer sentiment.

While the government has maintained that the slots given to other airlines could be taken back on a month’s notice, experts said it may not be easy given that airlines would book 3-6 months advance tickets for these flights.

“If asked to return, these airlines may argue that a large number of passengers would be inconvenienced by withdrawal of flights. There is certainly the possibility of delay in returning the slots,” an industry source said.

Deepak Jasani, Senior Vice President and Head, Retail Research, HDFC Securities, however, does not see any problem in the temporary re-allocation of slots. He also dismissed the apprehension of buyer interest being impacted by this.

“The airlines, which are getting the slots now, will have to vacate them once Jet Airways is again ready to operate flights. They originally belong to Jet and they have not surrendered them,” Jasani told IANS.

“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 can not get,” he added.

Another senior industry executive who did not wish to be named said that while on one side, public sector banks are trying to revive the airline, on the other, slots are being given to rival airlines.

“This is very unfair treatment. If majority of the slots at the busiest Delhi and Mumbai airports go from Jet Airways to other airlines, investors would certainly be put off, ” he said.

Meanwhile, at least two private airlines that have got additional slots said that they were taking bookings till July-end for now.

Aviation regulator Directorate General of Civil Aviation (DGCA) has been giving slots to other airlines to mount capacity to fill the gap created by the suspension of Jet Airways’ operations. The move is aimed at bringing additional capacity in the market before fares start soaring as a result of demand-supply mismatch.

According to industry sources, the country’s largest airline IndiGo has got nearly 20 slots while rival low-cost carrier SpiceJet bagged 16. Air India, Vistara and Air Asia India have also been allotted slots to start new flights.

Battling survival, Jet Airways has suspended operations for want of cash for fuel and other expenses. The airline’s fleet has shrinked to a skeletal 5 from the peak of 119.

The airline’s lenders are currently in the process of selling their stakes in the company to recover the loans of about Rs 8,400 crore.

SBI Caps, the merchant banking arm of the lead lender SBI, is mandated to complete the stake sale process.



(This story has not been edited by Newsd staff and is auto-generated from a syndicated feed.)
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