“Since no emergency funding from the lenders or any other source is forthcoming, the airline will not be able to pay for fuel or other critical services to keep the operations going,” the airline said in a statement. “Consequently, with immediate effect, Jet Airways is compelled to cancel all its international and domestic flights. The last flight will operate today (Wednesday).”
The airline has only been flying five turboprop planes in the past few days as lessors started to repossess over four dozen Boeing 737 planes since the airline failed to pay their dues.
The last Jet Airways took off from Amritsar at 2230 hours on Wednesday, bound for Delhi -– and an uncertain future -– with no indication that any investor will come up with a bid for a grounded airline that the lenders will find acceptable.
Jet Airways, which had reported total revenues of almost Rs 24,000 crore in the year ended March 2018, owes over Rs 8,000 crore to nine banks and aircraft leasing firms with the biggest debt exposures to State Bank of India and Punjab National Bank.
“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,” Jet said.
The carrier added that it would continue to support the bidding process initiated by lenders and that it hoped to return to the skies “as soon as possible”.
The bidding process is due to conclude on May 10.
The airline, which started operations 25 years ago and, at its peak, operated more than 120 planes and 600 flights a day, said it would inform all its guests about the temporary suspension of flight operations via text message or email to the contact details given in the bookings.
But there was no word on the payment of refunds to passengers, which could turn problematic since most bookings are made through travel websites that will not pay out money until they are sure of securing their own payments.
The collapse of Jet Airways will threaten about 23,000 jobs and bring back the bitter memories of Kingfisher Airlines which was forced to shut down operations in 2012 in almost similar circumstances.
In London, Vijay Mallya, the fugitive tycoon who is fighting his extradition to India to face charges of fraud and money laundering, tweeted: “I feel sorry to see such a large private airline on the brink of failure when the government used Rs 35,000 crore of public funds to bail out Air India. Just being a PSU is no excuse for discrimination.”
“My sympathies go out to Naresh and Anita Goyal who built Jet Airways that India should be extremely proud of…. Sad that so many airlines have bitten the dust in India,” he added.
The crisis – which comes bang in the middle of a crucial general election -- comes at an awkward time for Prime Minister Narendra Modi, who is battling accusations that his government did not do enough to create jobs.
The 26-year-old airline has posted losses in eight of the past 10 years and its share of the domestic passenger market has fallen to about 15.5 per cent in 2018 from 22.5 per cent in 2015.
“What has happened today is on expected lines because the resolution plan that banks had put forward in March was high on optimism and low on realism. However, we must understand the banks’ position; they could not infuse more money as the operations of Jet Airways was not sustainable as it has been reporting losses quarter after quarter,” Jitendra Bhargava, former executive director at Air India, told The Telegraph.
“The infusion of more money would have not materially changed the fortunes of Jet Airways. It is better to let the day of reckoning come as early as possible rather than put in more money and then allow the day of reckoning to be postponed,” Bhargava added.
