Jet Airways suspends all flights amid financial crisis

India's Jet Airways to suspend all operations after banks reject funding request

Cash-strapped Jet Airways on Wednesday announced that it is temporarily suspending all flight operations after a Rs 400-crore infusion of money was denied by its lenders.

The airline said it was forced to take the step as a consortium of lenders had turned down its request for emergency interim funding.

But the immediate worry is the lack of funds to keep the company afloat.

The airline merely said that due to "critical liquidity position of the company, its operations have been severely impacted".

"This has been a very hard 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", it added.

"Bankers did not want to go for a piecemeal approach which would keep the carrier flying for a few days and then again risk having Jet come back for more interim funding", said one of the bank sources directly involved in Jet's debt resolution process.

Separately, ET Now reported that the Export-Import Bank of the United States (EXIM) had recalled all loans to Jet and was seeking to repossess all the planes it funded.

Jet had requested 4 billion rupees (£44m) from state-run banks while it sought an investor to acquire a majority stake in it.

Jet said it will now await a bid finalisation process that will include on May 10, 2019, which it hopes will lead "to a viable solution for the company". "SBI is working on the emergency funding, everything is under discussion, nothing is finalised".

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It's, however, not clear whether the airline's decision shut operations is temporary.

The airline said the decision follows the lenders refusing to offer a lifeline.

The loyalty and rewards management company said that it is a separate, independent entity, and is a part of the Etihad Aviation Group.

India's aviation secretary told media late on Tuesday that Jet had only five aircraft flying on the day and that 90 percent of its slots stood vacant.

The airline now owes a significant amount to suppliers, staff and oil companies from the last few months and is reported to have a total debt in excess of $1.1 billion.

Once de-registered, lessors are free to take a plane out of the country and lease it to other airlines.

Pilots, engineers and ground staff have not been paid for months while passengers have been left stranded around the world.

As of 1415 GMT on Tuesday, Jet listed on its website roughly three dozen flights that it plans to operate on Wednesday.

Shares in the company, which have tumbled about 60 percent in the past year, closed on Tuesday at 240.50 rupees a share.

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