MUMBAI: India’s troubled Jet Airways said on Monday that founder Naresh Goyal has stepped down as chairman and left the company board as part of a rescue plan.
Jet, which has debts of more than $1 billion, said in a statement that its creditors would inject up to $218 million of “immediate funding support” into the airline. Its shares soared 13 per cent in Mumbai.
Indian media reports said that Goyal’s stake in Jet will fall to half the current 51 per cent. The statement said it would also issue 11.4 million new shares.
The Mumbai-based carrier, which until turbulence recently was India’s second biggest airline, has been forced to ground three-quarters of its 119-aircraft fleet.
This is because it was unable to pay aircraft lessors. Its pilots have also complained of delays in receiving their salaries, while the firm also defaulted on loan payments.
Thousands of customers have been stranded in recent weeks after hundreds of flights were cancelled, in some cases with little or no notice.
Jet, founded by Goyal in 1993, employs more than 20,000 people.
A collapse would deal a blow to Prime Minister Narendra Modi’s pragmatic pro-business reputation ahead of elections starting on April 11.
India’s air passenger numbers have rocketed six-fold over the past decade with its middle class taking advantage of better connectivity and cheaper flights. — AFP
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