Jet Airways founder and chairman Goyal resigns

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Indian carrier Jet Airways’ board has approved the resignation of founder and chairman Naresh Goyal who is stepping down from the troubled airline.

His resignation was proposed and accept at a meeting today, the airline said, where it also confirmed the conversion of lenders’ debt in exchange for equity and the immediate funding support of up to Rs15 billion ($218 million).

As part of the move, the consortium of Indian lenders, led by State Bank of India (SBI), will become the majority shareholders of Jet Airways, the airline said in a statement.

Other directors have also stepped down including his Naresh Goyal’s wife Anita Goyal and Etihad Airways representative Kevin Knight.

The Indian airline reportedly has debts of more than $1 billion and it has delayed payments to banks, employees, suppliers and even aircraft lessors. It operates a fleet of 119 aircraft but has had to ground more than 50 aircraft due to defaults on lease payments.

Jet Airways also said in the statement: “The airline will leverage the funding to partly clear pending dues towards lessors, vendors, creditors and employees in a phased manner.

“The move will see Jet Airways re-deploy several of its grounded aircraft back into its network, helping renew many of the routes it had temporarily suspended, which will help restore normalcy of operations, aiding the airline’s long term transformation to continue expansion and to regain its position as a global player.”

As part of the plan an an interim management committee has been set-up to monitor and oversee the daily operations and cash-flow of Jet.

Jet Airways added: “The airline’s robust and long-term operating plan focuses on revenue enhancement and cost optimisation as the fundamental pillars of building a healthy, growing and durable airline. The plan addresses a cross-section of areas in addition to an operating plan, which takes advantage of the airline’s fleet, its resources, slots and its network.

“As part of the resolution plan, the Lenders will also begin the process of sale/ issue of shares to new investors which is expected to be completed in the June quarter.

Naresh Goyal said as part of the airline’s statement: “For me, the 22,000 employees are my own family, as dear to me as Nivaan, Namrata and my wife Neeta, and no sacrifice is too big for me to safeguard the interest of Jet Airways and the families of the 22,000 employees.

“For the sake of my family of 22,000 employees and their respective families I have today taken the step of stepping down from the Board of Jet Airways. I became the Chairman on 1st April, 1992 and my family is behind me and with me in this decision and I hope you will support my decision too. I will miss you one and all.

“Thank you for your brilliant dedication and loyalty down the years. I am proud of you and wish you all a great future ahead with our Jet Airways.”