India’s oldest private airline Jet Airways has shut down all flights and operations temporarily after lenders refused to provide the emergency funding of Rs400 crore (around $57 million) it had requested.
Late on Wednesday (April 17), the airline said it has run out of cash to stay airborne. “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. Consequently, with immediate effect, Jet Airways is compelled to cancel all its international and domestic flights. The last flight will operate today,” an official statement to BSE read.
The airline’s last flight would take off from Mumbai to Amritsar tonight at 10:30 pm India time.
Debt-laden Jet Airways has been struggling for months to make ends meet after it failed to acquire a stop-gap loan of about Rs1,500 crore as part of rescue deal agreed upon in March. Lenders, who took control of the carrier last month, have been scouting for a buyer and had invited expressions of interest (EoI).
“The expressions of interest have been received and bid documents have been issued to the eligible recipients today. The bid documents inter alia has 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,” the lenders told the airline.
Initial EoIs were submitted by interested investors last week.
A year ago, Jet had a fleet of 150 operating aircraft, which, due to the recent troubles, had fallen to six.
In his letter to Jet’s employees, on April 16, CEO Vinay Dube said the management had stressed on the need for urgent funding, to its lenders. Reassuring staff, Dube had said the management would do everything possible to get things back on the track.
Analysts have been comparing Jet’s situation with liquor baron-turned-fugitive Vijay Mallya’s Kingfisher Airlines which terminated operations in 2012, leading to the loss of thousands of jobs. With a headcount of approximately 20,000, now it is Jet’s turn to brace for a dark period.