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Jet Airways: How to value an airline that is grounded

Updated : April 30, 2019 12:43 PM IST

Owing to a string of disconcerting events —  lessors’ repossession of aircraft, defaults including breach of debt covenants and multiple resignations  — Jet Airways is a shadow of what it used to be.
The financial value of any asset derives from the expected cash-flows that the asset will produce, but  Jet Airways at this point is not generating any cash.
With an assessment of the financial value and opportunity cost, one has to concurrently start layering in the strategic gain that will accrue to an airline investor or to a third party in the event of a secondary buyout or a trade sale.
Jet Airways: How to value an airline that is grounded

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