Mumbai: With lenders declining to extend Rs 400 crore lifeline, the cash-strapped Jet Airways said it will be temporarily suspending all operations from Wednesday.
In a regulatory filing, the carrier said: “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 which started flying on May 5, 1993, was operating only five planes, down from a fleet of more than 120 planes.
The airline, had on Tuesday sent one last request to lenders seeking emergency funds to remain afloat.
“Late (Tuesday) night, Jet Airways was informed by State Bank of India (SBI), on behalf of the consortium of Indian Lenders, that they are unable to consider its request for critical interim funding ... the airline will not be able to pay for fuel or other critical services to keep the operations going. Consequently, with immediate effect, Jet Airways is compelled to cancel all its international and domestic flights. The last flight will operate Wednesday,” Jet said in a regulatory filing to BSE on Wednesday night.
While rejecting Jet’s request for funding, the lenders told the airline in their reply on Tuesday night that “expressions of Interest (EOI, for Jet) have been received and bid documents have been issued to the eligible recipients. The bid documents inter alia has solicited plans for a quick revival of the company. The bid process will conclude on May 10, 2019. We are actively working to try and ensure that the bid process leads to a viable solution for the company”.
The Jet Airways board on Tuesday authorised CEO Vinay Dube to take a call on shutting down operations after making one last attempt with lenders for emergency funds.
In a mail to employees on Wednesday evening, Dube said: “Because no emergency funding from lenders or any other source of funding is forthcoming, it will not be possible for the company to pay for fuel or other critical services to keep the operations going. Consequently, with immediate effect we are compelled to cancel all international and domestic flights.”
“A decision like this is never easy to make, but without the interim funding, which we have been repeatedly requesting for, we are simply unable to conduct flight operations in a manner that delivers to the very reasonable expectations of our guests, employees, partners and service providers. Over the last several weeks and months we have tried every means possible to seek funding, both interim funding as well as long term funding, to keep our operations going, but we were not successful,” his mail said.
No end to Turbulence
While Prime Minister Narendra Modi may wish to see the aam aadmi catch a flight to travel across India, the aviation sector was never a lucrative business as 12 airlines crash landed in last 21 years. Today, we take a look at a few of the major airlines which were shut down or were rescued at the last moment.
Air India
Since its merger with Indian Airlines in 2007, Air India has constantly been posting losses. In March 2018, the government had attempted to divest its stake in the national carrier but failed. Now it is sitting on a mountain of debt, surviving on external support system.
Air Deccan
Air Deccan chairman G.R. Gopinath, who is credited with making flying affordable through the no-frills airline, sold his airline to Vijay Mallya’s Kingfisher Airlines.
Kingfisher Airlines
Vijay Mallya acquired Air Deccan to conform to 5/20 rule, which restricts an airline from flying abroad until it is either five years old or has a fleet of 20 aircraft. But eventually, costly crude oil turned the ‘King of Good Times’ into the ‘Poster Boy’ of bad loans and led to the closure of Kingfisher Airlines.
SpiceJet | SpiceJet changed several hands. Current promoter Ajay Singh had to give up control of the airline to the Maran brothers in 2012 after costly jet fuel bleed the company. After running for three years, the Maran brothers could not make it profitable and gave up management control to Mr Singh in 2015.
