Why a Major Indian Airline Is Being Sold for 1 Cent

Debt-ravaged Jet Airways India Ltd., the country’s biggest full-service airline, is selling a majority stake for 1 rupee -- a little more than 1 U.S. cent. It’s part of a bailout plan by its state-owned lenders that will give the airline time to arrange fresh equity. The complicated arrangement is on track to be voted through on Feb. 21, in what would represent the rescue of one of the country’s most visible companies at a sensitive time, with India’s general election just weeks away.

It’s consistently been one of India’s top three airlines in the past decade. Jet Airways was founded by ticketing agent-turned-entrepreneur Naresh Goyal after India ended a state monopoly on aviation in the early 1990s. It’s now 24 percent owned by Abu Dhabi’s Etihad Airways PJSC and controls 13.9 percent of India’s market, one of the fastest-growing in the world. Jet Airways also flies to international destinations including London and Singapore.