Indian regional carrier TruJet has reportedly had a change of ownership. The Hyderabad-based airline has now gone back to former promoter Vankayalapati Umesh who regained ownership from infrastructure giant Megha Engineering & Infrastructures Ltd (MEIL). TruJet has been in the news several times in the past year owing to COVID-related struggles and restructuring plans. Let’s take a look at the latest developments.
Indian regional carrier TruJet has had a change of ownership, going back to its former promoter Vankayalapati Umesh. Photo: Atamvir Multani via Wikimedia Commons
Ex-promoter takes back control
According to a report by the Hindu Business Line, MEIL has handed back control of the airline to former promoter Vankayalapati Umesh for an undisclosed amount. As reported, Umesh took over as the Managing Director on October 9th, with many from the board of TruJet resigning.
MEIL bought a 90% stake in the airline in 2014 and started operations in 2015. However, as TruJet struggled during the pandemic and with mounting losses, MEIL probably thought it was in their best interest to sell the cash-strapped carrier.
Umesh commented on MEIL’s decision, stating,
“While it impacted in a huge cash outflow for the parent company, MEIL realised that this was not part of its core business functions and wanted to handover the airline business to someone capable and keen on its safekeeping and continuous expansion.”
Flying in style 😎
Thank you for that stunning click!
Reposted from @planespotterschennaiofficial @flytrujet – @atraircraft 72-600 (VT-TMC), departing out of active runway 25 – heading back to @rgiahyd (HYD)#trujet #atr #atr72600 #aviationgeek pic.twitter.com/XhqpFMC9c5
— TruJet (@FlyTruJet) September 30, 2021
Partnership with aircraft lessor
The carrier’s new MD confirmed to Business Line that he is in the process of restructuring the airline. Quoting an email that Umesh sent to his employees, the report highlighted that Irish aircraft lessor Elix Aviation Capital is keen to become an equity partner and also lease 10 airplanes, with two almost immediately.
Umesh wrote in the email,
“I am at advanced stages of discussion with entities for institutional funding and to raise funds for the airline and I believe to be able to conclude the same in the next three months.”
He further added,
“Our existing lessor, Elix Capital, is also keen on leasing 10 aircraft to us with two aircraft immediately. They also want to be equity partners in the airline and will bring in value by way of aircraft induction and their global relationship in the aviation industry.”
Growth thwarted by COVID
Founded in 2013, TruJet began operations in 2015 with a flight from Hyderabad to Tirupati in South India using a fleet of ATR 72s. Over the next couple of years, the carrier expanded its network to various destinations across South and Central India, connecting several small cities under the Indian government’s UDAN-RCS (Regional Connectivity Scheme).
However, like many airlines, TruJet also buckled under COVID-related losses to the point where it had to ground most of its fleet earlier this year and risk losing its flying license. As of now, out of the carrier’s seven ATR 72, only one is in active service.
Struggling to stay afloat, MEIL had been looking for an investor for close to six months before striking a deal with New-York based investment firm Interups in April this year. Interups bought 49% equity in the company with plans of investing almost $1.9 billion. Most of the funding was slotted for the airline’s expansion, with Interups Chairman Laxmi Prasad announcing a potential order of more than 100 Embraer aircraft.
There was also news of a potential order of 100+ Embraer airplanes for TruJet earlier this year, but nothing has been confirmed so far. Photo: Simple Flying
However, there have been no reports of Interups injecting any money till now. But according to Business Line, Prasad maintains that he’s still part of the company.
Hopefully, we’ll get a better idea of the revised structural composition of TruJet in the near future, now that the carrier’s aircraft lessor has also shown interest.