After months of financial trouble, India’s first private airline Jet Airways has decided to temporarily suspend operations. This comes after Jet Airways was informed by the State Bank of India (SBI), on behalf of the consortium of Indian Lenders, that they are unable to consider its request for critical interim funding of Rs 400 crore.
Essential services needed to support guest services and the re-commencement of the flight operations will be kept onboard until further notice. The airline will inform all guests about the temporary suspension of flight operations via text message or email to the contact details listed in their bookings.
Jet Airways will stop operations as of the night of April 17. Jet has informed DGCA and the Ministries of Civil Aviation and Finance and other relevant government institutions, of this course of
action. As of April 7, out of a fleet of 128, Jet was down to operating only 5 aircraft, which is the minimum an airline will need to keep its operating permit.
“Since no emergency funding from the lenders or any other source is forthcoming, the airline will not be able to pay for fuel or other critical services to keep the operations going,” it said in a statement.
Over the last several weeks and months, the company has tried every means possible to seek both interim and long-term funding. However, its efforts have borne no fruit, forcing the airline to go ahead with a temporary suspension of flight operations.
On Tuesday, it extended suspension of its international operations till April 18. Hundreds of domestic flights too have been cancelled so far. Meanwhile, Jet Airways, on its website, has said that it is working to handle schedule adjustments including offering re-accommodation choices or extending full refunds as applicable.
Jet, which has been facing financial troubles for over a year now, owes its lenders Rs 8,000 crore rupees. It also failed to pay dues to lessors, which led to most of its flights getting grounded.
Jet Airways will now await the bid finalisation process by SBI and the consortium of Indian Lenders.
In its response to the airline, the lenders have said, “The Expressions of Interest (EOI) have been received and bid documents have been issued to the eligible recipients today. The bid documents inter alia has solicited plans for a quick revival of the company. The bid process will conclude on 10th May 2019 … We are actively working to try and ensure that the bid process leads to a viable solution for the company.”
The consortium of lenders, led by State Bank of India, invited expression of Interest for stake sale in the company to recover dues. As on Wednesday, Etihad Airways, NIIF, TPG Capital, Indigo Partners (a private equity firm) emerged bidders. It is offering stake from 31.2 to 75 per cent of the company on a fully diluted basis.
"Jet Airways is hopeful that it will be able to bring the Joy of Flying back to its guests as soon as possible. Over the past 25 years, Jet Airways has established itself as India’s airline of choice and the flag-bearer of warm Indian hospitality around the world. The airline has proudly fuelled India’s economic engine, enabling business travellers and tourists alike to traverse the length and breadth of India and the world. Even during the toughest of times, Jet Airways employees have worn a smile on their face and put their duty to its guests and the nation first," it said in a statement.