Fund-strapped Jet Airways has defaulted on loan repayment to banks, on what the airline termed “temporary cashflow mismatch,” after it delayed payment of salaries to pilots, aircraft engineers and senior management.
“Payment of interest and principal installment due to the consortium of Indian Banks (led by State Bank of India) on December 31, 2018, has been delayed due to temporary cashflow mismatch and the company has engaged with them in relation to the same,” Jet stated in a filing with the Bombay Stock exchange (BSE) late on Tuesday.
The beleaguered Indian carrier was reported to be close to finalising a financing deal with its Gulf partner Etihad Airways under which the latter will inject fresh funds.
Jet had also held talks with some investors like Tata Group for picking up stake in it
While the talks with Tatas have reportedly broken down, Jet is now in advanced talks with Abu Dhabi-based Etihad — which has 24 per cent stake in it — for increasing its stake and putting in funds.
Jet, which reported three consecutive quarters of over Rs1,000 crore loss, had Rs8,052 of debt on its books as of 30 September 2018.
The airline, which is struggling to cut costs and stay afloat, has reportedly assured pilots that there will be no delays in salary payments from 1 April.
Jet founder and majority shareholder Naresh Goyal has assured the airline’s pilot union that the funding, which will likely result in route restructuring and more flights to Abu Dhabi, could take place as early as mid-December, the channel said.
Cash-strapped Jet Airways is also trying to raise money by selling a stake in the airline and its loyalty programme.
Jet’s cash-crunch has also started affecting flyers as the airline has started slowly raising charges in some pretext or the other.