The Jet Airways board had on Tuesday authorised chief executive Vinay Dube to make one last appeal to the SBI-led consortium to get a life-line of Rs 400 crore.
Jet Airways aircrafts are seen parked at the Indira Gandhi International Airport in New Delhi. (Photo Credit: Reuters)
“Since no emergency funding from the lenders or any other source is forthcoming, the company will not be able to pay for fuel or other critical services to keep the ops going. With immediate effect, the company is compelled to cancel all its international and domestic flights,” Jet Airways said in a statement.
The airline, saddled with roughly Rs 8,000 crore of bank debt, had been teetering on the edge for weeks after failing to receive a stop-gap loan of about Rs 1,500 crore from its lenders, as part of a rescue deal agreed in late March.
“Bankers did not want to go for a piecemeal approach which would keep the carrier flying for a few days and then again risk having Jet come back for more interim funding,” one of the bank sources directly involved in Jet’s debt resolution process told news agency Reuters.
The Jet Airways board had on Tuesday authorised chief executive Vinay Dube to make one last appeal to the SBI-led consortium to get a life-line of Rs 400 crore Wednesday, before taking a final call on the future.
The once leading airline has been defaulting on payments, forcing its lessors to retake almost all its planes and it was operating just about six planes as of Tuesday.
Jet is the seventh airline to go down since May 2014 and the 13th one after East West was shuttered. During the past five years airlines like Air Pegasus, Air Costa, Air Carnival, Air Deccan, Air Odisha and Zoom Air have all gone belly up even as the government boasts of double-digits growth for more than four years in tow.
“The Jet Airways management’s request for Rs 400 crore emergency funds has been rejected,” banking sources told News18. According to sources, the government is maintaining distance from the Jet affairs citing the matter is a commercial decision of banks.