The Telegraph
Since 1st March, 1999
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Jilted Sahara to push for cash comfort

New Delhi, June 22: Air Sahara is likely to go ahead with a suit claiming damages from Jet Airways for lost business and goodwill as the fight over the escrow account intensifies.

Sahara officials confirmed that a legal move was likely to be initiated soon but would not quote sums to be sought from Naresh Goyal-led Jet Airways. Analysts believe the demand could be almost equal to the asking price for the airline.

The Lucknow-based group, which resumed charge of the airline today, a month after it had given over control of the airline to Jet, today promised to buy new aircraft, if need be raise fresh funds and continue “making profits in the skies”.

The Rs 2,300-crore buyout, which would have seen Air Sahara merging into Jet Airways, flopped yesterday. Jet stayed away from the final nuptial knot, claiming all pending regulatory approvals had not come in as yet. Sahara, however, charged it of backing out because it had not conceded last minute discounts sought by Jet.

In fact, security clearances for Jet chief Naresh Goyal, who was supposed to join the Sahara board, have reportedly been given today by the home ministry.

The clearance came even as Sahara filed caveats with Allahabad High Court's Lucknow bench against Jet taking any ex-parte judgment on the issue of control of the escrow account of Rs 1,500 crore. Sahara has already received Rs 500 crore from Jet, of which Rs 100 crore is non-refundable.

Sahara wants to put the Jet episode behind it now, the airline’s officials said.

Alok Sharma, president of Air Sahara, indicated the airline may raise up to $100 million (Rs 450 crore). The company is planning to induct four more Boeing 737-800 aircraft by the end of the year, besides placing orders for 10 more 737-800s to be brought in over a period of time.

On financial resource mobilisation for day-to-day running of the airline, he said: “The whole process of resource mobilisation has to be seen in context. For the past 13 years we have been running Air Sahara and running it well. Financial resources as usual will be internally raised. Yes we did go to the market but it was to see whether the group can get any benefit out of the boom in the industry. We do have many plans but it is too early to speak about them.”

Aviation experts, however, are concerned over the airline’s financial condition. Though Sharma has repeatedly said the airline has been making profits and is expecting to make more in 2006-07, many feel it may actually be losing up to Rs 70 crore a month because of high costs and lower revenue per seat.

Jet sources claim this was one of the reasons why they sought discounts from Sahara.

Air Sahara has 27 aircraft and operates 134 flights daily in India. It recently begun flying to the US, London and Singapore.

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