Jet Airways temporarily shuts operations as lenders refuse emergency funds

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NEW DELHI: Jet Airways will go gently into the good night on Wednesday when it stops all flights after almost 26 years of operations. India’s longest-serving private carrier may now take to the skies if a new buyer is willing to infuse funds into the airline.

The airline, which started flying on May 5, 1993, had on Tuesday sent one last request to lenders seeking Rs 983 crore as emergency funds to remain afloat.

“Late (Tuesday) night, Jet Airways was informed by State Bank of India (SBI), on behalf of the consortium of Indian Lenders, that they are unable to consider its request for critical interim funding … the airline will not be able to pay for fuel or other critical services to keep the operations going. Consequently, with immediate effect, Jet Airways is compelled to cancel all its international and domestic flights. The last flight will operate Wednesday,” Jet said in a regulatory filing to BSE on Wednesday night.

Given the situation, there is no clarity yet regarding the airline’s last flight. “It was supposed to be Amritsar-Delhi but even that may be cancelled,” said an airline official.

However, there is still hope that Jet may take to the skies again in some form.

While rejecting Jet’s request for funding, the lenders told the airline in their reply on Tuesday night that “expressions of Interest (EOI, for Jet) have been received and bid documents have been issued to the eligible recipients. The bid documents inter alia has solicited plans for a quick revival of the company. The bid process will conclude on May 10, 2019. We are actively working to try and ensure that the bid process leads to a viable solution for the company”.

The airline’s board on Tuesday authorized CEO Vinay Dube to take a call on shutting down operations after making one last attempt with lenders for emergency funds.

In a mail to employees on Wednesday evening, Dube said: “Because no emergency funding from lenders or any other source of funding is forthcoming, it will not be possible for the company to pay for fuel or other critical services to keep the operations going. Consequently, with immediate effect we are compelled to cancel all international and domestic flights.”

“A decision like this is never easy to make, but without the interim funding, which we have been repeatedly requesting for, we are simply unable to conduct flight operations in a manner that delivers to the very reasonable expectations of our guests, employees, partners and service providers. Over the last several weeks and months we have tried every means possible to seek funding, both interim funding as well as long term funding, to keep our operations going, but we were not successful,” his mail said.

While giving hope to employees that Jet is “worth investing in,” Dube’s mail gave a reality check to them as well. “ … the sale process will take some time and will throw up several more challenges for us, many of which we don’t have the answers to, today. For example, we don’t have an answer today to the very important question of ‘what happens to us employees during the sale process’,” he says.

Jet’s first flight had taken off on May 5, 1993, from Mumbai to Ahmedabad.

The airline would have turned 26 in just over a fortnight and will remain the longest living private Indian carrier unless someone else overtakes that record – an uphill task in India’s exceptionally cost-hostile environment for desi airlines.



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