Troubled Jet Airways has canceled west-bound long-haul flights from India between Thursday and Friday morning.
Reuters reports that Jet Airways has canceled a further 10 planes due to having not paid its leasing companies. The additional planes join two-thirds of Jet Airways fleet to be grounded. The Economic Times writes that the further cancellations consist of all its remaining international flights to Amsterdam, Paris, and London. The airline has also canceled a number of regional flights.
A company spokesperson confirmed the latest cancellations but did not confirm the size of Jet’s operational fleet. Reuters speculates that it could be lower than the minimum 20 required to operate internationally in India. The Economic Times, citing people in the know, says the operational fleet is down to 14 and that India’s air regulator, the Directorate General of Civil Aviation, is monitoring and assessing Jet’s eligibility to fly abroad.
The airline is over $1 billion in debt
Jet Airways has been in financial difficulties for months. It has over $1.2 billion in bank debt and owes leasing companies, suppliers, pilots, and oil companies. And, it has laid off staff. On March 30, it was revealed that 1,000 pilots could strike as of April 1, over unpaid wages. Cancellations have affected millions of passengers, some of which have gone to social media platforms to express their frustration.
Jet Airways planes have been grounded as oil companies reduce fuel supply terms. The airline has reported losses for nine out of the past 11 years. Its stock plummeted by 67% in 2018. Chairman Naresh Goyal stepped down in March, after 25 years at the helm of Jet.
Seeking a new investor
The airline’s lenders, including the State Bank of India, are seeking a new investor to take an up to 75% stake in the business. A deadline of Wednesday this week is now extended to Friday for bids. Any bidders must have a net worth equivalent to $144 million or at least three years of experience in the sector. Consortiums bidding for the stake must have no more than three members. Plus, each must hold a share of at least 15%.
The State Bank of India group took a 50.1% share in the airline in an attempt to save it. Etihad Airways PJSC of Abu Dhabi owns 24%. Etihad has reportedly shown interest in a larger stake in Jet in recent days.
Jet Airways hasn’t always been in turmoil. It broke the monopoly of state-run Air India Ltd, gaining success, and becoming India’s second-largest airline. Before recent cancellations, Bloomberg puts Jet’s fleet size as falling from 124 planes to 26.
Is it the end for Jet Airways?
Lenders leading the drive for a new investor say they will consider “other options” if one is not found. However, they haven’t revealed what these options could consist of. Further, Bloomberg reports that earlier steps by the Indian government to save jobs included asking other airlines, such as SpiceJet, to take over some aircraft.
It seems that Jet Airways eligibility to fly internationally could be questioned. With international flights canceled Jet’s revenue will be falling as its debts continue to stack up. The airline may be teetering on collapse. Its landing slots are already being redistributed to other carriers. However, if an investor can be found and action taken quickly there may still be a chance for Jet Airways to recover.