Indian airline Jet Airways has temporarily suspended all its domestic and international flights after failing to find fresh funding.
In a statement, Jet Airways' CEO Vinay Dube said the airline had no choice but to suspend the flights, and its last flight would operate on Wednesday as it was not able to pay for fuel and other critical services.
"Late last night we were informed by SBI (State Bank of India - ed), on behalf of the consortium of Indian lenders, that they are unable to consider our request for interim funding," Dube said.
He added that "Since no emergency funding from the lenders or any other source of funding was forthcoming, it would therefore not have been possible for us to pay for fuel or other critical
services to keep the operations going."
Dube also said that "Jet Airways is hopeful that it will be able to bring the joy of flying back to its guests as soon as possible."
From 124 to zero
In the last few days, Jet Airways had been operating just 6 ATR turboprop aircraft and one Boeing 737, which was operated by its subsidiary JetLite. It operated a total fleet of 124 planes in December.
Jet Airways has defaulted on loans as well as vendor and lessor payments. It has been forced to ground planes since the beginning of the year primarily due to defaults to leasing companies. It hasn’t paid its employees since January.
Just yesterday, the U.S. Exim Bank recalled all loans extended to the carrier for buying Boeing aircraft. Sources said it was likely that the bank would take the possession of these aircraft, thus, taking away all the long-haul Boeing 777 aircraft that the airline owns.
Bidders decide on the fate of Jet Airways
Meanwhile, the SBI-led consortium of lenders has selected Etihad Airways that owns 24% of the airline, PE investors TPG Capital and Indigo Partners as well as the state-run National Investment and Infrastructure Fund as qualified bidders. They have to submit binding bids by May 10.
"We are actively working to try and ensure that the bid process leads to a viable solution for the company," the consortium said in a statement shared by Jet Airways.
Etihad Airways, which acquired a 24% stake in Jet in 2013, has been touted as a possible buyer, but Abu Dhabi's national carrier has problems of its own after losing about US$4.9 billion in three years.
Nol van Fenema