AirAsia drops plan to take Jet Airways' grounded B737 planes

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AirAsia drops plan to take Jet Airways' grounded B737 planes

Following the closure of Jet Airways' operations, SpiceJet, Vistara and AirAsia had approached the airline to buy its narrow-bodied aircraft B737

Budget carrier AirAsia India has decided not to lease B737 aircraft of the grounded Jet Airways due to several complications in inducting these planes into the carrier's fleet. After showing initial interest, the Tata Group venture airline has now reportedly decided to continue with only one type of aircraft. Cash-strapped Jet Airways shut down its operations on April 17. The grounding of one of India's biggest airlines gave competitor airlines an opportunity to fill the capacity gap. Following the closure of Jet Airways' operations, SpiceJet, Vistara and AirAsia had approached the airline to buy its narrow-bodied aircraft, B737.

Though Air Vistara had applied for the approval of the Directorate General of Civil Aviation (DGCA) after approaching Jet, the company didn't pursue the plan further. "AirAsia India had informed the aviation regulator about their plan to lease some of the B737 airplanes that were operated by Jet Airways. But later it did not follow up," Mint quoted a source as saying. Beside Air Asia, both SpiceJet and Vistara have inducted 24 of Jet Airways' B737 planes, including 20 by SpiceJet alone. However, the Bengaluru-based airline has plans to increase its existing fleet capacity by adding over 21 more A320 aircraft in the two years.

Also read: Jet Airways crisis: Naresh Goyal, wife stopped from flying abroad at Mumbai airport

Naresh Goyal and his wife Anita Goyal had resigned from Jet Airways board on March 25, transferring the control to the lenders led by State Bank of India. Top five executives of the airline, including CEO Vinay Dube, have already resigned from the airline citing "personal reasons".

The company ceased operations temporarily around mid-April due to an acute liquidity crisis. Lenders to grounded Jet Airways, however, are confident over the future of the airline, with Rajnish Kumar, chairman of State Bank of India (SBI) expressing hope that clarity will emerge soon.

Also read: Jet Airways CEO Vinay Dube resigns a day after CFO Amit Agarwal quit company

The consortium of 26 lenders, which seeks to recover their dues of over Rs 8,400 crore, had shortlisted private equity firm TPG Capital, Indigo Partners, National Investment and Infrastructure Fund (NIIF) and Etihad Airways to submit their bids after they put forward their Expression of Interest (EoI). Out of four, only Etihad Airways expressed its interest to buy a stake in the debt-laden airline that too on the last date of the bidding i.e. May 10. There were reports that the bidders had lost interest in the airline after its aircraft and slots at airports in Delhi and Mumbai were handed over to competitors. However, SBI Chairman had ruled out the National Company Law Tribunal (NCLT) route for the crisis-hit Jet Airways.

ALso read: Jet Airways revival plan: Etihad puts debt write-down on the list

Edited by Manoj Sharma