Jet Airways may halt services temporarily, say reports
16 April 2019
Jet Airways Ltd has proposed to temporarily suspend all services till it gets sufficient funds and a suitable investor to continue operations, reports citing sources close to the development said.
Jet Airways founder Naresh Goyal, meanwhile, decided not to bid for acquiring stake in the cash-strapped airline. Airline sources said Goyal, who had stepped down as chairman of the carrier last month, has withdrawn the bid documents.
The crisis at Jet Airways has deepened with lenders offering no relief to the cash-strapped carrier. With no eligible suitors offering to acquire stake in the ailing airline, the consortium of banks refused to disburse the promised Rs1,500-crore lifeline to Jet Airways.
News channel CNBC TV 18 citing unnamed sources said the airline is likely to temporarily shut down operations. A meeting of Jet Airways’ board today authorised Jet’s CEO to engage with its lenders one last time, and halt operations, if no funds arrive.
Separately, ET Now reported Jet’s management has proposed to suspend all operations as one option at Tuesday’s board meeting, or alternately continue with skeletal operations with any interim funds infused by State Bank of India (SBI), which leads Jet’s consortium of lenders.
It is still uncertain whether some stop-gap funding will help keep Jet Airways flying until a solution to its many ills is found. Lenders are reported to have tried to calm investors hinting at rescuing the airline that is saddled with roughly $1.2 billion debt.
“Lenders are committed to a revival plan for Jet Airways,” Punjab National Bank’s managing director Sunil Mehta told reporters. “SBI is working on the emergency funding, everything is under discussion, nothing is finalised.”
However, pleas by employees for stop-gap funding to keep alive the airline’s services have fallen in deaf ears and the airline is staring at a possible shutdown in the absence of funds.
A meeting between the Jet Airways management and the lenders on Monday failed to secure interim funding for the airline to pay dues to employees and lessors as the company does not have any asset to securitise any funding.
“As you are aware, we have been working with the lenders to secure an interim funding for our operations. The interim funding has not been forthcoming thus far... The current status of our engagement with the lenders and other related matters shall be placed before the board in the meeting scheduled for tomorrow (Tuesday) morning, where the management will seek guidance from the board on the next steps forward,” Jet Airways CEO Vinay Dube said in a statement ahead of the meeting.
On Monday, Jet Airways pilots sought the prime minister’s intervention to save 20,000 jobs and appealed to SBI for funds to keep the beleaguered Indian carrier flying and save it from the brink of collapse.
Jet Airways pilots body, the National Aviator’s Guild, appealed the State Bank of India (SBI) to release the Rs1,500 crore it proposed to infuse in the ailing carrier as part of a debt-restructuring plan last month.
The airline is operating just 6-7 planes, with almost its entire fleet being grounded due to non-payment of rentals to lessors amid severe paucity of cash.
“We would like to appeal SBI to release Rs 1,500 crore funds for the airline to help it continue operations. We also appeal Prime Minister Narendra Modi to save 20,000 odd jobs at the airline,” National Aviator’s Guild ( NAG) vice president Adim Valiani told reporters.
The airline said it has extended cancellation of all international operations till 19 April due to the fund crunch. There are only about seven flights on domestic routes that are operational.
The pilots and staff of Jet Airways, who have been planning a strike to push for pending salaries, have now put off their plans.
Lenders are hoping to get a new strategic investor in place to run the airline.