Jet Airways (JAI, Mumbai International) has appointed several specialist European and US-based firms to help draft funding and restructuring plans to help lean down its cost base and improve its marketability to would-be investors.
According to company sources who spoke to India's Live Mint, the cash-strapped carrier appointed Goldman Sachs Group to help locate potential buyers for an equity stake in the airline while Boston Consulting Group (BCG) will advise on ways to improve its operational efficiency. Lastly, McKinsey & Company will provide consultancy on the development and implementation of cost reduction measures.
Aside from a weakening Indian rupee and soaring fuel costs, privately-held Jet Airways has also had to contend increased domestic competition all of which have contributed to its current constrained cash flows. Given its increasingly tight financial position, Jet has had to effect dismissals, delay salaries, ground at least eight aircraft (an A330-200, an A330-300, a B777-300(ER), two B737s and three ATR72-600s), and has had to seek increased flexibility from lessors and suppliers in terms of payment deadlines.
Recent reports indicate that Jet has courted investors such as TPG Capital and Blackstone for its stake in its Jet Privilege loyalty programme. Delta Air Lines, Air France-KLM, and even Tata group have also been courted over majority shareholder Naresh Goyal's 51% stake in the airline.
