Jet Airways Has No Option But To Shutter As Banks Refuse Funding
With the lenders rejecting a lifeline of Rs 400 crore, Jet Airways Ltd., which has been on a wing and prayer since January, is left with no other option but to ground operations, at least temporarily.
Since the March 25 resolution to infuse Rs 1,500 crore into the airline is yet to fructify, the once-leading airline has been defaulting on payments, forcing its lessors to retake almost all its planes and was operating just about six planes as of Tuesday.
An official announcement of grounding of operations is expected anytime now as the Jet Airways board had on Tuesday authorised Chief Executive Officer Vinay Dube to make one last appeal to the State Bank of India-led consortium to get a lifeline of Rs 400 crore on Wednesday, before taking a final call on the future.
Jet will be the seventh airline to go down since May 2014 and the 13th one after East West was shuttered. During the past five years airlines like Air Pegasus, Air Costa, Air Carnival, Air Deccan, Air Odisha and Zoom Air have all gone belly-up even as the government boasts of double-digits growth for more than four years in tow.
The Jet Airways management’s request for Rs 400 crore emergency funds has been rejected, banking sources told PTI. A source at the Jet Airways also said the airline was likely to shutter soon as the banks have not extended it the required financial support. “The airline has failed to garner the funds it was desperately looking for to continue operations,” he said.
The airline is currently operating only five planes from 123 aircraft in the fleet till last December. According to sources, the government is maintaining distance from the Jet affairs citing the matter is a commercial decision of banks.