Bankrolled Carrier

SBI’s takeover of Jet’s operations is unprecedented in India. But will it give wings to the ailing airlines?

- Jeevan Prakash Sharma

CAN a banker fly an aircraft? Rhetorical as it may sound, the question still demands an answer. More so in the curious case of the loss-making and debt-laden Jetairways, the latest case of a fairytale story gone awry. In an unprecedented move, a consortium of banks led by the State Bank of India (SBI) has taken over the airlines to manage its day- today operations till they find a suitable buyer. Jet has already seen the forced exit of its founder Naresh Goyal, a former ticketing agent who set up the airlines 25 years ago. Industry experts are surprised by SBI’s move. “Such a practice has been adopted in the past for smaller companies—worth Rs 100 or 200 crore—but not for a big company like Jet Airways, whose debt amounts to over Rs 10,000 crore,” says a.K. Ralhan, former chief operating officer of the Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSaI).