Jet Airways is facing a temporary shutdown, with a consortium of banks hesitant to provide emergency funds and its number of planes in operation reduced to just five as most of its fleet remains grounded.
The government, in its bid to defuse the crisis, met the Jet lenders in New Delhi but the funds have proved to be elusive.
Civil aviation secretary Pradeep Kharola separately reviewed the situation with director-general of civil aviation (DGCA) B.S. Bhullar. The DGCA on Tuesday asked the airlines to keep their fares under check.
The civil aviation ministry has called a meeting of the representatives of airlines and airports on April 18 to discuss capacity expansion, rising fares and other issues.
Earlier in the day, the board of Jet Airways in Mumbai authorised Jet CEO Vinay Dube to engage with the lenders for funds. Dube wrote to the SBI seeking an immediate infusion of up to Rs 400 crore.
In a late-evening clarification to the stock exchanges, the company said given the critical liquidity position, its operations had been severely impacted and that it was awaiting emergency liquidity support from the consortium of domestic lenders led by the State Bank of India.
Jet has already halted its international flights till Thursday.
The view is that the domestic operations, running with a fleet of only five aircraft, will shut down temporarily if the interim funds do not arrive.
Punjab National Bank (PNB) managing director Sunil Mehta told newspersons in the capital on Tuesday that while the banks are committed to reviving the carrier, nothing has been finalised yet. “Discussions for reviving the airline are underway and nothing has been finalised as of now. SBI Capital Markets is working on the revival package for Jet Airways.”
PNB is the second largest lender to Jet Airways among the consortium, which collectively has an exposure of over Rs 8,000 crore.
“The Jet management has sought Rs 400 crore from the lender, but the consortium of lenders has not yet taken a call,” Kharola told reporters in Delhi.
The aviation secretary said five aircraft of Jet Airways was flying on Tuesday and the slots of the carrier were being allotted on a temporary basis to other airlines.
“The infusion of funds by the lenders even if it comes through would be too little, too late. The delay has wiped out Jet Airways of its value and there would be little interest for the bidders to buy out the stake,” Mark Martin, an aviation consultant, told The Telegraph.
The Telegraph
Fares shoot up
The aviation secretary said on Tuesday the DGCA has found the fares were around 10-30 per cent higher in about 10 sectors and had identified 40 sectors vulnerable to a price hike.
Airlines were advised to continue to monitor fares at their level and provide information to the DGCA.
“Airlines representatives also intimated DGCA that they have removed the few higher buckets from sale and were offering tickets to passengers in lower fare buckets,” officials said.
Spot booking data of a travel website showed Delhi-Bangalore fares were in the range of about Rs 13,500, Bombay-Calcutta about Rs 26,000 and Delhi-Calcutta priced around Rs 39,500.
Kharola said the airlines were in talks with the lessors of Jet Airways’ deregistered planes and a good number could come in, if the grounded planes are leased to other airlines.
