Bankrupt Indian carrier is world’s best performing airline stock

By Rahul Vaimal, Associate Editor
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Jet Airways
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All airlines have been feeling the coronavirus pinch, but one airline that has not flown since April 2019 since crashing under a pile of debt is the world’s best performing airline stock, at least from a share price point of view.

The stock in Mumbai-listed Jet Airways India Ltd. increased by almost 150% this year, compared to a 42% decline in the 27-member Bloomberg World Airlines Index, which includes the largest carriers in the world.

Its rapid gains have the left market watchers puzzled, especially because Jet Airways is facing bankruptcy proceedings. It has nearly 17,000 creditors pursuing claims of about $3.4 billion and has confiscated most of its landing slots. It has no staff to speak of, either.

Retail investors are the last ones to get anything out of a bankruptcy, yet some are buying in the hope Jet Airways will successfully emerge from a restructuring, said industry experts. The airline isn’t being thought of as a going concern, but a shell containing assets that may be sold, they added.

Settlement plans

A settlement plan was accepted last month by a panel of creditors, taking the recovery of any dues one step forward, but that does not guarantee a resumption of Jet Airways flights.

The resolution plan for Jet Airways was submitted by two individuals, Murari Lal Jalan and Florian Fritsch, exchange filings show. Mr. Jalan is a businessman with investments in India, Russia and Uzbekistan. Mr. Fritsch is the chairman of Kalrock Capital Management Ltd., a London-based financial advisory and alternative asset manager. But the filings don’t state how the men plan to restructure the airline.

Jet Airways was India’s number one private carrier in its heyday, taking on the monopoly of state-run Air India Ltd. and providing free gourmet meals and in-flight entertainment for intercontinental voyages. But a bunch of budget airlines that offered no fancy stuff, ultra-cheap tickets were eating up their market share, and Jet Airways began to drown in debt.

In 2013, the UAE’s national airlines and parent company of Jet Airways, Etihad had bought 24% stake in the carrier for $379 million, giving the cash strapped airline a fresh lease of life. This was part of Etihad’s strategy to invest in airlines and make them part of its global plan of aggressive growth in the global skies.