The Weekend Leader - Jet fails to get funds, to suspend operations

Jet fails to get funds, to suspend operations



Jet Airways announced that it has temporarily suspended all flight operations from Wednesday night as the airline failed to secure an interim funding for maintaining even bare minimum operations.

The company's decision came after the airline failed to secure an interim funding from lenders to stay afloat.

Currently, the airline only operated five aircraft with over 25 flights. The airline is expected to operate its last flight for the day around 10.30 p.m.

Later in the evening, Jet in a regulatory filing, said that late on Tuesday night, the State Bank of India (SBI), on behalf of the consortium of Indian lenders, told it that they are unable to consider its request for critical interim funding.

"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," the airline said in the filing.

"Consequently, with immediate effect, Jet Airways is compelled to cancel all its international and domestic flights. The last flight will operate today."

As per the filing, Jet has informed the Directorate General of Civil Aviation, the Ministries of Civil Aviation and Finance and other relevant government institutions of this course of action.

"Over the last several weeks and months, the company has tried every means possible to seek both interim and long-term funding. Unfortunately, despite its very best efforts, the airline has been left with no other choice today but to go ahead with a temporary suspension of flight operations," it said in the filing.

"This has been a very difficult decision but without interim funding, the airline is simply unable to conduct flight operations in a manner that delivers to the very reasonable expectations of its guests, employees, partners and service providers."

The airline said that essential services needed to support guest services and the re-commencement of the flight operations will be kept on board until further notice.

"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 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, have 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."

Informing employees about the decision, the airline CEO Vinay Dube said: "Late last night we were informed by SBI, on behalf of the consortium of Indian lenders, that they are unable to consider our request for interim funding of Rs 983 crore."

"However, we must also be realistic that the sales process will take some time and will throw up several more challenges for us, many of which we don't have the answers to, today."

On its part, JetPrivilege, which is a separate, independent entity, part of the Etihad Aviation Group said: "We would like to assure our members that the value of their JPMiles are secure and remain intact."

Jet has already folded up most of its operations due to grounding of over 90 per cent of its fleet by lessors.

The cash-starved airline had extended cancellation of international flights till April 18 (Thursday) after last week suspending them till April 15 (Monday).

Jet's woes have intensified as the airline that once operated around 120 aircraft is now left with just a 16-plane fleet.

It owes over Rs 8,000 crore to the SBI-led consortium of lenders.

On Tuesday, the airline's scrip on the BSE declined by Rs 19.95, 7.62 per cent, to Rs 241.85 from its previous close of Rs 261.80. The stock market was closed on Wednesday.IANS

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