Jet Staring at Temporary Shutdown, Down to 5 Operational Planes

The airline is making last-ditch efforts to raise funds, people familiar with developments at Jet Airways said.

Updated16 Apr 2019, 04:48 PM IST
4 min read

Cash-strapped Jet Airways said on Tuesday, 16 April, that it is awaiting "emergency liquidity support" from the SBI-led consortium of lenders to arrest further deterioration in its services.

The airline, which is operating only five planes, said its operations have been severely impacted due to critical liquidity position.

Cash-strapped Jet is also staring at the possibility of a temporary shutdown of its operations, with the airline’s management set to take a final call soon.

“All options would be explored before deciding on its operations,” people in the know said, as per PTI.

CNBC-TV18 quoted Aviation Secretary PS Kharola as saying that Jet has requested Rs 400 crore from the banks

Naresh Goyal Opts Out of Bidding

Meanwhile, Jet founder Naresh Goyal has decided not to bid for acquiring stake in the cash-strapped airline, news agency PTI reported quoting sources.

The full-service carrier, which is currently operating less than 10 aircraft, is awaiting fresh fund infusion under a debt-resolution plan.

Jet Airways shares, which opened the day on a weak note, further plummeted 18.56 percent to Rs 213.20 in afternoon trade on the BSE.

"The company's leadership, in consultation with its board of directors, is engaged with lenders in connection with the said emergency funding request... The company is also in constant engagement with the Directorate General of Civil Aviation and Ministry of Civil Aviation in this regard," Jet said in a filing to the BSE.

The filing was made in response to a clarification sought by the exchange regarding reports that the airline was likely to temporarily shut down its operations.

The carrier, which was founded more than 25 years ago, has already suspended international operations till 18 April.

Airline sources said Goyal, who had stepped down as chairperson of the carrier last month, has withdrawn the bid for the airline, PTI reported. On 12 April, sources said that Goyal had also put in bid for the carrier.

Meanwhile, reports suggested that DGCA is in a meeting with the airlines on Tuesday to decide the carrier's slots and passenger fares.

This came after the Civil Aviation Minister Suresh Prabhu tweeted earlier in the morning saying he has directed the ministry’s secretary to review issues related to fare hike, flight cancellations and passengers' safety.

Meanwhile, Punjab National Bank (PNB) Managing Director and CEO Sunil Mehta also said that the banks are committed to devise a revival plan, which is being discussed.

“SBI, SBICaps have started working on the plan. Revival plan has not been finalised yet, discussion is still on,” news agency ANI quoted him as saying.

In an internal communication, Chief Executive Vinay Dube also said the airline's board will meet on Tuesday to discuss the carrier’s next steps.

This is the third time the airline has extended suspension of these flights, which was first announced last Thursday.

“We have extended cancellation of international operations through Thursday, 19 April,” Vinay Dube said in a communication. But it later clarified that the extension was to run through 18 April.

Dube said the decision was taken following the non-receipt of funds from its lenders, who have now management control of the airline following a debt-restructuring plan last month.

“We have been working with the lenders to secure interim funding for our operations. The interim funding has not been forthcoming thus far,” he added.

He also said the current status of engagement with the lenders and other related matters will be placed before the board on Tuesday morning to seek guidance on the next steps.

Its long-haul overseas operations is carried out by wide-body Boeing B777s and Airbus A330s, while it deploys smaller B737s into the Middle East, SAARC and Southeast Asia markets.

The airline has only five planes in its operational fleet now. Rest of the planes, in its fleet of 123, are grounded due to non-payment of rentals to the lessors and lack of cash to purchase jet fuel.

Pilots Urge PM to Save 20,000 Jobs

The Jet Airways’ pilots’ body National Aviator’s Guild (NAG), ahead of a key meet on Monday, had urged the prime minister to help save 20,000 jobs.

Besides, it also appealed to the State Bank of India to release Rs 15,000 crore for the airline’s survival, news agency PTI reported.

Earlier on Sunday, keeping into consideration, a meeting between the Jet Airways’ management and the lenders slated to take place on Monday, the carrier’s pilots deferred their “no flying” call, which was to kick in on 15 April, to a later date.

"It is come to our notice that there is a critical meeting planned tomorrow morning with the airline management and SBI. In light of the meeting, the members have requested, through their team leaders, that the call of 'No Pay No Work' be deferred to give the airline a chance of survival. Accordingly, as requested, the Committee would like to inform all that the decision stands deferred for the time being," the Guild committee said in a late evening communication to its members on Sunday.

The pilots were requested to come at the Jet Airways’ headquarters on Monday morning as a show of unity.

US Bank to Start Repossessing Boeing 777s

US Exim Bank has recalled all loans extended to Jet Airways for buying Boeing aircraft and is likely to take the possession of these aircraft, Economic Times reported.

Sources quoted by the report said that the amount of loan is about Rs 2,000 crore and the Bank is soon going to initiate the process of possessing the aircraft.

(With inputs from LiveMint, PTI)

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Published: 15 Apr 2019, 06:40 AM IST

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