Ground reality

Mumbai, March 30: Sahara India has moved Bombay High Court against Jet Airways for alleged non-payment of instalments related to the buyout of erstwhile Sahara Airlines (now JetLite) in April 2007.

“Sahara India has not accepted this position (income tax liability prior to the takeover is to be borne by Sahara) and moved Bombay High Court for appropriate relief. Since the matter is sub-judice, we do not want to comment on the merit of the case,” a Jet spokesperson said.

The income tax department has raised certain demands on Sahara India Airlines for the period prior to the takeover and unrelated to the activities of JetLite before the takeover, the spokesperson said.

It is the position of Jet Airways that this liability is to be borne by Sahara since arrangement for the payment of this liability has not been made by it, he added.

These amounts deposited by JetLite were deducted from the instalments payable under the award, the spokesperson said.

Sahara officials were not available for comments despite repeated attempts.

Jet Airways had purchased Sahara Airlines for Rs 1,450 crore and paid Rs 900 crore upfront. Over the next four years (beginning 2007), the private carrier had agreed to pay Rs 137 crore as yearly instalments.

Jet has been going through a bad patch this year along with other airlines. It reported a Rs 214-crore loss in the third quarter ended December 2008 on an income of Rs 3,063.1 crore.

Its losses have amounted to Rs 455.3 crore for the nine-month period ended December.

Last week, the International Air Transport Authority forecast that Asian airlines would account for $1.7 billion of the $4.7-billion worldwide losses that the industry is expected to suffer in 2009.