Oct 8: Jet Airways has announced that its frequent flyer program, Jet Privilege Pvt Ltd (JPPL) has brought to the airline’s coffers an amount of $35 million, about Rs 260 crore, from pre-purchase of tickets. Jet has been delaying salaries to the employees due to some economic issues.
A 50.1 per cent of the stake in JPPL is owned by Etihad, based in Abu Dhabi. It also holds a 24 per cent stake in Jet Airways. According to reports, JPPL under the normal course of business settled a prepaid ticket purchase agreement for $ 35 million. Jet’s frequent flyer program regularly purchases these tickets in order to offer its members against redemption of miles. Therefore this is a part of the normal business between Jet Airways and JPPL.
Reports also added that Etihad had proposed a support plan for Jet Airways which was approved by most of its stakeholders. The $35 million cash pre-purchase payment to Jet Airways by Jet Privilege was also part of this plan. Etihad Airways holds a majority stake in JPPL.
In April- June 2018 quarter, Jet lost Rs 1,323 crore while it made a profit of Rs 53.5 crore in the first quarter of the last financial year. This is the highest loss in the history of the 25-year-old company.
Naresh Goyal, Chairman at Jet, who made the announcement was quoted as saying by news sources that the two important offers considered by the board of directors infusion of capital and the monetization of the airline’s stake in its loyalty programme came out good for the long-term economic health and sustainability of the airline.
Due to the fund drain off Jet Airways is under being observed by DGCA and the Ministry of Corporate Affairs.