Bangkok--11 Apr--Centre for Asia Pacific Aviation
All will be revealed next week on Gulf Air’s major restructure plans and Jet Airways revived takeover of Air Sahara - but here are the key points, as we understand them:
Gulf Air’s new CEO, Andre Dose, has wasted no time in sweeping the broom through the loss-making Bahrain-based carrier, with a management shake-up coupled with a comprehensive restructure based on fleet and network simplification. Full details will be released next week, but the indications are that the B767 fleet of regional unit, Gulf Traveller, is to be axed, as part of plans to reduce the fleet from 34 to 28 aircraft, with an all-Airbus platform.
Meanwhile, the arbitration process between Jet Airways and Air Sahara looks likely to result in a revived takeover offer. Jet last year offered USD500 million for Air Sahara, but then walked away as Indian airline valuations fell sharply due to LCC-led price competition and high fuel costs.
Under the new agreement, also to be announced next week, Jet would pay approximately USD320 million for the airline, excluding:
USD40 million Jet spent for running Air Sahara for three months last year;
USD120 million deposit paid to an escrow account;
USD65 million creditor’s deduction;
Potential interest on the deposit, plus opportunity costs.
The total amount looks to be higher than the original bid and does not include the further investment required to restructure loss-making Air Sahara.
Both Gulf Air and Jet Airways look to have their work cut out for them.