BackNot against FDI from foreign carriers: Jet’s Goyal
Airline's founder-chairman had previously fought against FDI by foreign airlines
Premium
Mumbai: Naresh Goyal, founder-chairman of Jet Airways (India) Ltd, said he’s no longer opposed to allowing foreign direct investment (FDI) by overseas carriers in domestic airlines.
“I am entitled to change my view as the whole world is changing," Goyal said on the sidelines of the 20th annual general meeting of Jet Airways, the country’s largest airline by passengers carried, that was held after the company announced June quarter results on Friday. “Today, I may not need FDI, but tomorrow I may need."
The civil aviation ministry is considering a proposal to allow 49% FDI by foreign carriers in Indian airlines, which lost a combined ₹ 10,000 crore in the last fiscal year. Foreign airlines are currently barred from investing in domestic carriers. Non-airline foreign entities are entitled to invest up to 49%.
Goyal has previously fought against FDI by foreign airlines, while Vijay Mallya-led, cash-strapped Kingfisher Airlines Ltd has been in favour of it.
Goyal said he’s not talking to any overseas carriers for a possible investment at this stage.
Asked about the technical possibility of receiving FDI, he said Jet Airways was an Indian company and eligible for such investments if they were allowed.
Goyal owns 80% of Jet Airways through Tailwinds, registered abroad.
The airline had written to the Foreign Investment Promotion Board clarifying the shareholding pattern and its eligibility in the course of seeking to raise funds, said K.G. Vishwanath, vice-president (commercial strategy and investor relations) at Jet Airways. The government is yet to approve Jet’s request.
Goyal said he is willing to dilute his stake to fuel expansion. “I will have an open mind to dilute my stake (while) keeping control in the company," he said.
Vishwanath said Jet Airways has a total debt of $2.46 billion ( ₹ 13,800 crore today), 80% of which is backed by assets.
The airline plans to retire $400-500 million of debt this fiscal, chief executive officer Nikos Kardassis said. Towards this end, the company will sell and lease back nine Boeing 737 planes and three Airbus 330 planes.
Jet Airways hasn’t been able to carry out a plan to raise $400 million for the last four years, citing poor market conditions.
“We will be tapping the market at the right time to raise funds," said Vishwanath.
Goyal told shareholders that the company will continue to focus on strict cost controls in the current fiscal year.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
