India plays crucial role in Etihad's growth strategy, says airline official

India plays a crucial role in Etihad Airways' growth strategy, contributing significantly to the airline's global operations, a top company official said.

Marking the Abu Dhabi-based carrier's 15-years of flying to India, Neerja Bhatia, Etihad Airways' Vice President, Indian Sub-continent, reiterated the airline's unwavering commitment to the country over the last 15 years, which she said, has resulted in Etihad Airways becoming one of the most preferred airlines for travellers from India.

Etihad began operations in India in September 2004.

A statement released by the airline said Mumbai was the first route in the country to be served by Etihad and today the city ranks highest in terms of total passengers the airline has carried over the years, with the number exceeding 3.5 million.

Owing to passenger demand on this route, Etihad introduced a fourth daily service to Mumbai last year. Delhi and Cochin rank second and third, with the airline carrying over 3.2 million and 2.3 million passengers on these routes, respectively over the years. Etihad has also added a fourth daily frequency on its Delhi - Abu Dhabi route.

As a result of its optimized schedule of non-stop flights between the UAE and India, appealing to greater numbers of point-to-point business and leisure passengers, Abu Dhabi is now the most popular destination for Indian travellers on the Etihad network, said the statement.

Etihad operates 161 return flights per week between Abu Dhabi and 10 key Indian gateways of Ahmedabad, Bengaluru, Chennai, Cochin, Delhi, Hyderabad, Kolkata, Kozhikode, Mumbai and Thiruvananthapuram, connecting each of these gateways to international destinations.

Etihad Airways remains committed to its largest and busiest market, India. The UAE and India have shared strong commercial, cultural and historic relations and we will continue to honour these excellent trade and tourism ties through closer partnership with our friends in the Indian travel trade," Danny Barranger, Etihad Airways' Senior Vice President Global Sales, said.

Etihad to offer wireless streaming, remove screens from narrow-body fleet

Abu Dhabi's Etihad Airways will offer wirelessly streamed movies and television shows to passengers on mainly short-haul flights as it removes entertainment screens from its Airbus A320 narrow-body fleet.

The airline, which is embarking on a turnaround strategy after years of heavy losses, announced a new economy-class product for its 23 A320 jets on Sunday.

Passengers will be encouraged to connect their personal devices to an onboard streaming service that does not rely on internet satellite to watch entertainment content.

All 23 A320s are expected to be refitted by August, the airline said, while a senior executive said the removal of screens would save the airline 18 tonnes in weight a year.

The weight reduction will mean aircraft use less fuel, a major operating cost for all carriers.

The A320s are mainly used on short-haul regional flights but also to cities within five hours' flying of Abu Dhabi, Etihad said.

The airline has downsized its growth ambitions and is focusing on point-to-point traffic.

Jet Airways crisis deepens as Etihad refuses to agree on contours of deal

Tony Douglas, the chief executive officer of Abu Dhabi-based Etihad Airways, flew down to Mumbai on Monday morning for an unusual meeting with State Bank of India (SBI) Chairman Rajnish Kumar and a few other top bankers to discuss the sticky issues in the rescue plan for Jet Airways.

At the end of the meeting, the crisis seemed to have deepened as Etihad, which holds 24 per cent in Jet, refused to agree on the contours of the deal. According to sources aware of the development, Douglas has informed a consortium of lenders, led by SBI, that Etihad would not participate in the rights issue or infuse fresh funds under the current terms and conditions of the resolution plan.

It is learnt that the lenders made it clear to Etihad that it must either endorse the bank-led resolution plan or convey to them that it’s not willing to put in more money.

The bankers also told the airline that they are willing to take “hard decisions’’, hinting that they could think of taking Jet to the National Company Law Tribunal (NCLT) if a resolution fails. Although Jet has run out of cash completely and has grounded half its fleet, the lenders have so far resisted any move to take the airline to the NCLT. Dragging Jet Airways to the NCLT could mean a haircut of 55-60 per cent for the lenders. (The difference between the banks' outstanding loan and what they realise from the sale or liquidation under bankruptcy proceedings is referred to as a haircut.)

Another reason why lenders are trying hard to save Jet from bankruptcy is that the government wouldn’t like an airline going down so close to the Lok Sabha elections.

While the official statements issued by Jet and Etihad conveyed a sense of continuity, executives tracking the events closely indicated a deadlock over the current deal. Even as Jet employees including pilots fear a shutdown of the operation, founder chairman Naresh Goyal wrote a letter to the airline staff saying it was a ‘’complex process’’ and would therefore require more time. 

"The complexity of the process has led to some delays and will require a further short time to conclude. I am personally committed to have the process completed as soon as possible and restore much needed stability to our operations at the earliest… Meanwhile, talks with our strategic partner Etihad Airways and lenders led by State Bank of India are ongoing. We are in constant dialogue with them," Goyal wrote while assuring the staff that their pending salaries would be cleared once all parties sign on the resolution plan.

Naresh Goyal, Etihad close to Jet resolution plan; outcome likely in a week

Jet Airways promoter Naresh Goyal and his joint venture partner Etihad Airways are close to hammering out an agreement on the banks-led resolution plan and the outcome is expected within a week, sources in the know said.

“We are hopeful that Jet Airways will have a resolution in a week. Intense negotiations are going on. It is our desire that the airline keeps running — that is the fundamental difference between Jet and other NPA (non-performing asset) accounts,” a senior executive of one of the banks involved in the restructuring of the airline said. The banker added that they were working on a “comprehensive solution and not a patchwork”.

The two partners have already agreed upon a Rs 4,000-crore interim financing plan according to which Etihad will put in Rs 750 crore either on its own or from an offshore or onshore lender, and a matching amount will be provided by the Jet lenders. Goyal has agreed that Jet Airways will pledge 34.9 per cent of its shares in Jet Privilege (JPPL) to Etihad and the lenders for this interim loan. Jet Airways owns a 49.9 per cent stake in the loyalty programme company, while the rest is held by Etihad.

According to estimates, the valuation of the pledged share is around Rs 1,700 crore, providing adequate security for both the banks and Etihad, who will arrange interim finance to get the company out of the woods. To smoothen the process, Jet Airways has also received permission from the Ministry of Civil Aviation to pledge its shares in JPPL.

However, talks are on to resolve the differences between Etihad and Goyal on a contentious clause that limits the shareholding of the promoter to 22 per cent. The foreign carrier has been insisting that Goyal should not be allowed to increase his stake beyond this cap, and should also have a limit of nominees to the board at two. Goyal, however, has signed the memorandum of understanding on condition that the “perpetuity” clause will be removed and there would be no cap on promoter investment as well as a cap on the number of nominee directors if and when they increase their shareholding.

A senior executive of a bank that is part of the lending consortium, however, points out that the issue is not that contentious that it cannot be resolved and is not a deal breaker.

Jet is in serious trouble with over 59 aircraft of its fleet being forced to be grounded due to its inability to pay lessors. 

Goyal has warned that the airline could be grounded if interim financing, which was expected to be disbursed early this week, does not come soon. Jet has already defaulted on an ECB repayment of $31 million on March 11 and is staring at yet another default of $109 million on March 27, which is payable to HSBC Bank.