Naresh Goyal, founder and chairman of Jet Airways. Photo: AFP
Naresh Goyal, founder and chairman of Jet Airways. Photo: AFP

With India’s second largest airline Jet Airways posting three quarterly losses in a row and facing an acute cash crunch to carry out its regular operations, the position of its founder Naresh Goyal has become shaky.

The ailing airline has accumulated debts of over 80 billion rupees or US$1.14 billion, and lenders, led by State Bank of India, the country’s largest bank, are looking for ways to help the airline, as well as the future role of Goyal and composition of the board, Business Standard reports.

The State Bank of India may consider converting its debt to equity.

The lenders have reportedly said Goyal should step down from the Jet Airways board, but he may be allowed to continue in a non-executive capacity. There is speculation that one of Goyal’s family members may be inducted to the board, but not allowed to chair it, the daily added.

On December 31 the airline missed payment of part of its loan dues and banks have initiated steps for the resolution of assets according to norms laid down by the Reserve Bank of India. Earlier, it defaulted on lease rent and other dues to lessors and other vendors, several of whom have served notice on the airline.

Goyal, who holds 51% stake in the 25-year-old airline is willing to dilute it to half, and the State Bank would hold a stake of more than 20% in the airline. The airline’s foreign partner Etihad Airways currently holds a 24% stake.

In November Tata Group expressed interest in buying a stake in the airline, but it wanted existing stakeholders, including Goyal, to cede control. The proposal was rejected by the airline management.