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Jet Airways Almost on The Brink of Shutdown, Facing Mounting Ground Problems

The possible scenario which may send the scrip plunging, say analysts, is if the bidders do not match up to the expectations of lenders or they lose interest after the initial Expression of Interest or the whole process gets entangled or delayed in the law courts.

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"In the case of other airlines facing stress, the government reacted differently largely because of their lower share on international routes," he added. Pixabay

BY: RAVI DUTTA MISHRA

From a fleet of 119 until last year to only 7 as of on Monday, Jet, once India’s second-largest airline by market share, is almost on the brink of a shutdown. But the change in fortune for the airline has not dented investor confidence as the Jet counter continues to remain resilient.

Jet’s scrip is down just by a little over 6 per cent since January 1 even though the airline’s performance has nose-dived ever since it defaulted on its loan commitment in December.

For Jet, the developments are unlike how things panned out for an airline like Kingfisher during its turbulent times that ultimately led to its closure. Analysts say that this is largely owing to Jet’s 30 per cent market share on international routes.

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Prior to the grounding which has depleted around 90 per cent of Jet’s fleet size, the airline, with its large fleet, offered flights to 56 destinations in India and overseas. Pixabay

“The government is keen that they should keep this entity afloat by selling it to other airline partners. This is also important as Jet accounts for 30 per cent market share on international routes,” Sandeep Raina, Associate Director, Edelweiss Professional Investor Research, told IANS.

“In the case of other airlines facing stress, the government reacted differently largely because of their lower share on international routes,” he added.

Prior to the grounding which has depleted around 90 per cent of Jet’s fleet size, the airline, with its large fleet, offered flights to 56 destinations in India and overseas.

Besides its international share, Jet has some valuable assets, said Deepak Jasani of HDFC Securities.

“It owns 16 planes which are worth $400 million. The Jet Privilege programme, the international routes, and landing and parking slots in key cities make the airline an attractive option for potential buyers or can be easily monetised by its lenders (under IBC),” he added.

However, the airline on Monday said it has extended the cancellation of all its international flights until April 18, which might spell trouble for it on the stock exchanges.

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Jet’s scrip is down just by a little over 6 per cent since January 1 even though the airline’s performance has nose-dived ever since it defaulted on its loan commitment in December. Pixabay

Inflating debt is another major concern for investors. Jet owes over Rs 8,000 crore to a consortium of lenders led by the state-run State Bank of India (SBI).

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The possible scenario which may send the scrip plunging, say analysts, is if the bidders do not match up to the expectations of lenders or they lose interest after the initial Expression of Interest or the whole process gets entangled or delayed in the law courts.

“If a non-strategic investor (including the National Infrastructure Investment Fund) wins the bid or the company needs to be nationalised or taken over by the government (through Air India or any other route)… in all such cases, its stock price could plunge,” said Jasani.(IANS)

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India: Government Aims to Increase Present $2.7 Trillion Economy to $5 Trillion by 2025

The middle class literally wailed when the petrol prices shot up by Rs 2.50 per litre, diesel prices hiked up by Rs 2.30 per litre

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India, Government, Economy
Instead of making US dollar a bench mark of aspirational currency, why not work on making Indian Rupee stronger? PIxabay

The moment after the “bahikhaata” Union Budget was presented on Friday, people took to social media platforms that erupted with angry and perplexed reactions.

“Your folder is sanskaari, symbolising ‘departure from slavery of western thought’, but your aspirations are 3 trillion ‘US DOLLARS’ economy, huh hypocrite!” tweeted a user.

Finance Minister Nirmala Sitharaman announced that the government aims to increase the present $2.7 trillion economy to $5 trillion by 2025.

“Instead of making US dollar a bench mark of aspirational currency, why not work on making Indian Rupee stronger?” another user posted.

India, Government, Economy
The moment after the “bahikhaata” Union Budget was presented on Friday, people took to social media platforms. Pixabay

Another social media user shared the lines from an old song: “Achcha sila diya tune mere pyar ka”.

The middle class literally wailed when the petrol prices shot up by Rs 2.50 per litre, diesel prices hiked up by Rs 2.30 per litre just hours after the union budget was presented.

“This has been one of the poorest budgets for common honest tax payer and middle class. You are bound to lose many supporters,” a user wrote in reply to former finance minister Arun Jaitley’s tweet on the budget.

“Petrol prices, diesel prices higher. What are the benefits for honest tax payers? What is the tax benefit, pension benefit, gratuity amount holding by corporate companies?? You really care for honest people (Salaried)?” another person tweeted.

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The budget also announced that for I-T returns, PAN and Aadhaar cards would be made interchangeable to help tax payers file their returns.

“So ‘PAN and Aadhaar will become interchangeable’ is somehow a tax benefit to middle-class Indians? So, you first introduce a problem, and then increase the problem, make it more complicated, and then reduce it again (but still keep it confusing) – that somehow becomes a benefit?” a user questioned the decision.

“PAN and Aadhaar interchangeable will not help middle class,” another user tweeted.

People also criticised that the issue of unemployment was not addressed seriously.

India, Government, Economy
Finance Minister Nirmala Sitharaman announced that the government aims to increase the present $2.7 trillion economy to $5 trillion. Pixabay

“Hopeless budget 2019… no help or news for unemployment,” a tweet said.

The millennials, however, had some fun with the budget.

“So, the budget has been declared, still there is no announcement on subsidy for annual subscription of Netflix, Prime and Hotstar. Is this the India we want to live in?” posted a Twitter user.

The funny memes also kept circulating.

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Depicting the “before budget” and “after budget” feelings, a meme showed Prime Minister Narendra Modi first sitting on a rock, and then lying down flat on the rock.

The images and videos of former Congress President Rahul Gandhi looking blank and later dozing off went viral. (IANS)