India’s largest private carrier Jet Airways (India) Ltd, has managed to get a loan of Rs 1000 crore from the Abu Dhabi based Mubadala Development Co, an investment company promoted by the government of the emirate of Abu Dhabi. The loan will help fund the working capital needs and expansion plans of the otherwise ‘on the decline’ aviation company, which has shown a loss of Rs 384 crore for the second quarter of this fiscal. The airline is also struggling with the overdues to the state-owned oil markets,, airport authorities and operators. Jet’s outstanding to the oil firms is Rs 1,057 crore. It has also ordered 10 Boeing 777-300ERs, for which it needs Rs 4,000 crore.

Mubadala owns Abu Dhabi Aircaft Technologies, which provides aviation technical services to carriers (Kingfisher Airlines is a client). The agency has also bought 35 per cent in the aircraft manufacturer Piaggio Aero Industries. Mubadala also came into the limelight for buying 5 per cent in Ferrari.

According to Kapil Kaul, CEO, Centre for Asia Pacific Aviation, India and West Asia “For the two largest private carriers in India — Jet Airways and Kingfisher Airlines — another six months will be the most crucial and the major concern for both will be raising the working capital” With a market share of around 30 per cent, Jet recently tied up with its main rival Kingfisher Airlines. It will cut costs by sharing ground-handling facilities, and pilots, and rationalize routes.

Mark Martin, senior advisor, aviation, KPMG said “Getting private funding is good news, because what is important for airlines is to get dedicated investors who can be committed for a longer period rather than speculative investors”.