Unable to obtain emergency funding, Jet Airways, India’s second-largest commercial airline, has cancelled all flights Wednesday, April 17. “Jet Airways is compelled to cancel all its international and domestic flights. The last flight will operate today,” it said in a statement on Wednesday, adding that the decision would take “immediate effect”. The carrier confirmed it had no other option as a consortium of lenders had refused its request for emergency interim funding, leaving it unable to pay for fuel or other critical services to keep operations going. With a current debt of approximately US$1.2 billion, the airline has recently been forced to dramatically shrink its operations, primarily due to lessors deregistering planes in order subsequently reclaim them and lease them to another operator, and an inability to carry out standard maintenance and repairs on other grounded aircraft.
At its peak Jet Airways was operating over 120 jets, providing a combined 600 international and domestic flights on a daily basis. More recently the airline’s fleet had shrunk to five operational aircraft and only provided a very limited domestic service. An analysis of the latest data disclosed by the Directorate General of Civil Aviation shows that Jet Airways’ lessors have, so far, sought to deregister and repossess at least 48 planes operated by Jet, while it is understood that lessors had applied to deregulate a further four Boeing 737 jets.
Separately on Wednesday, two sources at state-run banks told Reuters news agency that the banks had rejected the 4bn rupees (US$58m) that Jet had sought to keep itself temporarily afloat, while its lenders attempted to identify an investor willing to acquire a majority stake in the airline and attempt to turn it around. “Bankers did not want to go for a piecemeal approach which would keep the carrier flying for a few days and then again risk having Jet come back for more interim funding,” said one of the bank sources directly involved in the airline’s debt resolution process.