It is a sad and tragic day for Jet Airways, its employees, passengers and the aviation sector. In an extraordinary set of circumstances and after "painstaking evaluation", the bleeding airline has announced that it will suspend all operations, domestic and international, with immediate effect.
The last flight of Jet Airways will operate at 2220 IST on Amritsar-Mumbai route.
The airline, saddled with roughly Rs 8,400 crore of bank debt, has been teetering for weeks after failing to receive a stop-gap loan of about Rs 1,500 crore from its lenders, as part of a rescue deal agreed in late March.
"Late last night, we were informed by SBI, on behalf of the consortium of Indian lenders, that they are unable to consider our request for interim funding of Rs 983 crore. Because no emergency funding from the 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," CEO Vinay Dube told employees in a communication a short while ago.
The company said that the decision has been taken after a "painstaking evaluation" of all alternatives that were made available to the company and after receiving guidance and advice on the same from its Board of Directors. Jet Airways has informed the DGCA, and the Ministries of Civil Aviation and Finance and other relevant government institutions, of this course of action.
"Over the last several weeks and months, the company has tried every means possible to seek both interim and long-term funding. Unfortunately, despite its very best efforts, the airline has been left with no other choice today but to go ahead with a temporary suspension of flight operations," the airline told stock exchanges.
While Jet Airways management had sought enough funds to pay employee salaries, the banks were only keen on lending for fuel and small payments for landing, parking. “The last payment received was of Rs 2.5 crore from SBI. It is not a home loan, it is an airline,” a source told CNBC-TV18.
"This has been a very difficult decision but without interim funding, the airline is simply unable to conduct flight operations in a manner that delivers to the very reasonable expectations of its guests, employees, partners and service providers," the airline said.
“Jet Airways sincerely regrets the inconvenience caused to its guests due to the temporary suspension of its operations. Guests can avail refunds as per the established process. Those booked on partner airlines’ documents will be re-accommodated by them,” the airline said, replying to queries related to refund.
Various slots of the airline have already been transferred to domestic carriers and Jet Airways will only have time till the end of summer schedule or October 26 to get them back.
Also, in order to retain the wide-bodied aircraft, Jet Airways will need substantial funding soon. In absence of slots and these aircraft, which are the key assets for an airline, it will be difficult to sustain the interest of a buyer, industry experts said.
“The Expressions of Interest (EOI) have been received and bid documents have been issued to the eligible recipients today. The bid documents inter alia have 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 said in their response to the company.
Jet Airways will continue to support the bid process initiated by the lenders, the airline said.
A once leading airline, Jet has been defaulting on payments, forcing its lessors to retake almost all its planes and was operating just about six planes as of Tuesday.
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-digit growth for more than four years in tow.
With uncertainty mounting over the future course for the airline, which has been in operation for more than 25 years, its shares crashed nearly 19 per cent during the day.
(With inputs from agencies)