Gulf Air to cancel Jet lease deal

Bahrain's national carrier Gulf Air has walked away from a deal to lease four Boeing 777 aircraft from India's Jet Airways, citing economic conditions. Gulf Air said it had an option to lease the aircraft after an existing six-month contract expires, but has decided not to go ahead, the Gulf Daily News reported. "After careful analysis of various commercial and other business considerations, Gulf Air has decided not to pursue the dry lease option for the foreseeable future," the daily quoted the airline as saying. Dry leases are contracts under which airlines lease planes without staff. Gulf Air said in February it had agreed to lease four Boeing 777s as part of its efforts to replace its fleet. The existing six-month contract is a wet lease agreement, which typically includes staff. Meanwhile, Gulf Air has placed a $270 million order for CFM56-5B engines to power 15 new Airbus A320 family aircraft. The aircraft are scheduled for delivery between 2009 and 2013. The carrier has also signed a 10-year On Point Solution agreement of $100 million with GE Aviation for the maintenance, repair and overhaul of the engines. "Selecting the CFM56-5B engine demonstrates our continued trust and confidence in this product's excellent technical capability," said Gulf Air chairman Talal Alzain.

Source: Business Standard

Global PE players eye stake in JetLite

Naresh Goyal-promoted Jet Airways is believed to be in preliminary talks with leading international private equity players for offloading a minority stake in JetLite, the name given to Air Sahara that it acquired three months ago for Rs 1,450 crore.

Global investment companies and equity funds like Dubai-based Istithmar PSJC, US private equity firms Texas Pacific Group and Blackstone and Singapore’s investment holding company Temasek Holdings have been approached by merchant bankers associated with the talks.

Sources close to the development said Jet Airways, which is readying itself for a $400 million rights issue to fund its expansion plans, may dilute up to 25 per cent in JetLite. Jet Airways Executive Director Saroj Datta, however, denied that talks were on for divesting equity.


Sources said JetLite would be profitable by October-November. The rebranding exercise has begun with Jet Airways integrating Air Sahara’s frequent flyer programme.

Meanwhile, the airline has been repositioned as a “value carrier” — that is, an airline between a low-cost and a full-service carrier. To this end, JetLite has discontinued business class operations from June and re-configured its aircraft to all-economy seats.

(Source: Business Standard )

Jet eyes stake in SpiceJet

Barely two months after the Air Sahara acquisition, Jet Airways, the country’s largest private airline, is interested in SpiceJet, the Delhi-based budget carrier.

Sources close to the developments said Jet is eyeing the stake of the Kansagra family-promoted Royal Holding Services and Gulf-based investment house Istithmar PJSC, which hold around 13 per cent each in the airline.

Jet Airways combined with JetLite (earlier known as Air Sahara) has a 29.3 per cent market share, but trails behind the Kingfisher Airlines and Air Deccan combine.

An acquisition of SpiceJet, which has a market share of 8.2 per cent, could push up Jet’s share to 37.5 per cent, which would be way ahead of the Kingfisher-Air Deccan combine’s 30.2 per cent.

Besides domestic coverage, a SpiceJet acquisition would result in synergy of engineering, pilots, maintenance, training and other operations.

(Source: Business Standard)