Jet Airways likely to raise dollar loans to cut borrowing costs

21 Sep 2011 Evaluate

Jet Airways, India’s premier international airline is planning to raise $210 million in fresh debt by the end of this fiscal to cut borrowing costs. This move will help the company to offset higher borrowing costs for rupee loans. The airline is trying to convert part of its Rs 3,000 crore worth of loans into dollar loans but is facing challenges on that front.

The company’s large fleet of aircraft is an asset that can act as a natural hedge for its dollar debt. Sale and leaseback is also an option on some planes if repayment of loans is necessary. The company’s earlier plan of sale and leaseback of 3-4 aircraft during the quarter is also on track, which is expected to fetch the company another $8-9 million an aircraft. Earlier this year, the airline company raised close to Rs 200 crore in a land deal. The airline's total debt as of end-July stands at Rs 13,530 crore.

Recently, Jet Airways, received delivery of its first next generation Boeing 737-800 with Sky Interior. The induction of the new state-of-the-art Boeing 737-800 into Jet Airways’ young fleet is in keeping with the airline’s commitment to continually innovate and differentiate its product for a heightened in-flight experience.

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