Jet Airways, India’s oldest private airline, decided to suspend all flights from Wednesday night as cash ran out and banks refused to give more money. It became the second major airline to shut down operations, even temporarily, this decade after Kingfisher in 2012.
“Since no emergency funding from 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. Consequently, with immediate effect, Jet is compelled to cancel all international and domestic flights,” the airline said in a statement. Its last flight was from Amritsar to Mumbai on Wednesday night.
Jet said the decision was 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”.
While Jet had already been running a bare minimum number of 35-40 flights for the past few days, a total shutdown, even temporary, will significantly affect its value for potential investors that are participating in a bidding process to invest in the airline. The Jet stock on Tuesday fell close to 20% on rumours of an imminent shutdown. It closed 8% down at about ₹242 on BSE. Markets were shut on Wednesday.
The civil aviation ministry posted from its official Twitter handle that it would “support the resolution process” for Jet. “We are assisting airlines and airports to bring in capacity to ensure fares remain stable and competitive,” it also added.
The move came after Jet’s last-ditch attempt to raise emergency loans failed on Wednesday evening. The airline had approached banks with an appeal for ₹983 crore. The banks refused to release any funds without additional collateral.
The grounding had been imminent to the airline’s management for some time, as it was flying a fraction of its original 124 plane network which made it India’s second-biggest flyer of passengers till January.
It said that over the last few weeks, it 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”.
“Since no emergency funding from 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. Consequently, with immediate effect, Jet is compelled to cancel all international and domestic flights,” the airline said in a statement. Its last flight was from Amritsar to Mumbai on Wednesday night.
Jet said the decision was 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”.
While Jet had already been running a bare minimum number of 35-40 flights for the past few days, a total shutdown, even temporary, will significantly affect its value for potential investors that are participating in a bidding process to invest in the airline. The Jet stock on Tuesday fell close to 20% on rumours of an imminent shutdown. It closed 8% down at about ₹242 on BSE. Markets were shut on Wednesday.
The civil aviation ministry posted from its official Twitter handle that it would “support the resolution process” for Jet. “We are assisting airlines and airports to bring in capacity to ensure fares remain stable and competitive,” it also added.
The move came after Jet’s last-ditch attempt to raise emergency loans failed on Wednesday evening. The airline had approached banks with an appeal for ₹983 crore. The banks refused to release any funds without additional collateral.
The grounding had been imminent to the airline’s management for some time, as it was flying a fraction of its original 124 plane network which made it India’s second-biggest flyer of passengers till January.
It said that over the last few weeks, it 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”.
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