Etihad Airways proposes plan to support Jet AirwaysSheetal Sukhija - Saturday 6th October, 2018
MUMBAI, India - Abu Dhabi-based Etihad Airways, which currently owns 24 percent stake in Jet Airways, has confirmed that it has proposed a financial restructuring plan for the Indian carrier.
In a statement on Thursday, Etihad Airways said that its financial restructuring and support plan for Jet Airways has been approved by its majority shareholder.
According to the United Arab Emirates airline, its proposal for the Mumbai-headquartered airline included a $35 million cash pre-purchase payment to Jet Airway’s frequent flyer programme JPPL.
The Jet Airway’s frequent flyer programme - Jet Privilege Private Ltd (JPPL) is majority owned by Etihad Airways, which owns 50.1 percent stake in the programme.
Etihad Airways said in its announcement, “This plan includes a $35 million cash pre-purchase payment to Jet Airways by Jet Privilege, which is majority-owned by Etihad Airways."
Further, Jet Airways said that it has concluded a prepaid ticket purchase agreement for $ 35 million with Jet Airways, under the normal course of business.
The airline issued a statement saying, “JPPL (Jet Privilege Private Ltd) regularly purchases these tickets to offer its members against redemption of Miles hence the said transaction is no different and is done under the normal course of Business between Jet Airways and JPPL."
The full-service carrier, Jet Airways faces stiff competition from budget airlines that operate on a lower cost model.