Cash-Starved Jet Airways Requests Lenders For Rs 400 Crore As Fleet Shrinks to 5 Aircraft
Once India's largest airline with a fleet of 123 aircraft, Jet Airways has now been reduced to a meagre five-plane operation as losses crossed over Rs 10,000 crore.
Mumbai: Financially-challenged Jet Airways has reportedly requested lenders for an interim funding of Rs 400 crore to stave off a temporary closure, even as its current operational fleet further shrunk to five aircraft.
"The company's leadership, in consultation with its board of directors, is engaged with lenders in connection with the said emergency funding request... The company is also in constant engagement with the Directorate General of Civil Aviation and Ministry of Civil Aviation in this regard," it said in a filing to the BSE.
According to the Civil Aviation Secretary Pradeep Singh Kharola, the airline on Tuesday operated only five aircraft down from seven yesterday. Under the current regulations, the airline is required to operate five aircraft to save its air operating permit.
He said Jet's airport slots are vacant and that they being re-allocated to other airlines on a temporary basis.
The ministry is expected to meet airport operators and airlines to sort out the slots issue.
However, the airline's lenders said they remain committed to its revival.
Punjab National Bank (PNB) Managing Director and CEO Sunil Mehta said discussions were on to provide interim funding.
"Lenders are committed to Jet Airways' revival. SBI and SBI Capital are working on a package but it has not been finalised," he said.
Earlier in the day, industry insiders said that Jet has asked lenders to provide an immediate interim funding of Rs 400 crore else the airline might be forced to temporarily suspend overall operations.
Earlier in the day, the airlines' board meeting ended inconclusively as the airline awaited the lenders' decision on its plea for interim funds to stay aloft.
A day before, the airline presented a plan for interim funding to its lenders.
"The Board meet was inconclusive. We are awaiting for the lenders' reply. It is of paramount importance that we receive a clarity on interim funding," an airline source told IANS in Mumbai.
The development assumes significance as the airline has almost run out of funds to pay for fuel and other operational expenses.
Industry insiders says without extra funds, the airline might have to temporarily suspend operations.
It has folded up most operations due to grounding of over 80 per cent of its fleet by lessors.
Awaiting the outcome of lenders' meeting with the government, the cash-starved airline has extended cancellation of international flights till April 18 (Thursday) after last week suspending them till April 15 (Monday).
Jet's woes have intensified as the airline that once operated around 120 aircraft is now left with just a 16-plane fleet.
It owes over Rs 8,000 crore to the SBI-led consortium of lenders. Its only ray of hope is an immediate injection of interim funding and the completion of the stake sale process, initiated by lenders.
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