Yahoo Finance India's biggest private airline Jet Airways suspends all flights as rescue talks fail
Jet Airways has temporarily cancelled all flights, after efforts to save the struggling carrier fell through.
The company, which reportedly owes various lenders up to $1.2bn (£900m), had been in talks with a consortium of lenders through the State Bank of India (SBI) for several weeks, following a bail-out request from the Indian government.
However, it announced on Wednesday that it will operate its last flight – for the time being – as these lenders have declined to provide the emergency interim funding needed to pay for fuel and other critical services that would keep operations going.
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With 123 planes, Jet Airways is India’s biggest airline. However, it was forced to cease international flights on 12 April, as its operational fleet dwindled below the Indian requirement of five.
Passengers have been left stranded around the world, in locations including Paris, Amsterdam and London, as a result of these cancellations.
Many of the company’s 23,000 employees, including pilots, engineers and ground staff have reportedly not been paid for one to two months.
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Jet Airways called the decision to ground all flights “difficult” and an “extreme measure”. Its “prolonged and sustained efforts with lenders and authorities did not yield the desired results,” it explained.
The SBI, on behalf of the consortium of Indian lenders, told Jet Airways they were “unable to consider its request” for critical interim funding, according to the statement.
The airline said: “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.
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“After 25 years of sharing the joy of flying with Indian and international guests, Jet Airways has been forced to take this extreme measure as prolonged and sustained efforts with lenders and authorities did not yield the desired results.”
The company will now wait for the SBE and lenders to finalise the bid process on 10 May. Essential services needed to support guest services and the re-commencement of flight operations will be kept on board until further notice, it said.
In response to the airline’s statement, the lenders said: “We are actively working to try and ensure
that the bid process leads to a viable solution for the company.”
