Published on : Friday, April 12, 2019
Troubled airlines Jet Airways scrapped all international flights for Thursday night and Friday morning even as it operated only 14 aircraft during the day — the smallest fleet among scheduled domestic carriers.
The aviation ministry had earlier said it would review Jet’s eligibility to fly abroad in case its fleet strength fell below 20 — the minimum number needed to be eligible to operate international flights.
The beleaguered carrier cannot even afford to refuel wide-body planes and meet other expenses of maintaining foreign flights in absence of the promised Rs 1,500-crore emergency funding from its lenders. Unless the fund is infused quickly — the entire sum and not in a trickle — it is endgame for the airline as it can shut down completely in a matter of days, Jet sources say.
“What all flights we can resume from Friday afternoon will depend on the lenders meeting their promise,” a senior Jet official said.
The carrier informed BSE on Thursday evening that 10 more aircraft had been grounded. With international routes suspended, it will operate only about a couple of B737s and ATRs each on some domestic routes from Thursday evening to Friday unless fund infusion makes it possible to mount expensive wide body routes.
“We are in liquid oxygen — neither alive nor dead. The promise of emergency funds is the elusive oxygen as we drown in absolute cash crunch. The promised lending must come in one go and not in parts,” said sources.
The airline had 14 operational aircraft on Thursday — 7 wide body (six Boeing 777 and one Airbus A330) and 7 Boeing 737s and turboprop ATRs. Indian carriers with at least 20 planes in its fleet are allowed to fly abroad. But even before government could review Jet’s eligibility to go abroad, cash crunch will make Jet India’s smallest schedule airline flying only domestic routes till Friday morning. Whether the situation remains like that or changes will depend on lenders loosening their purse strings as promised.
The Jet board reviewed the situation during the day and asked the management to “impress” on the lenders to make good their promise. “The stake sale process is on and even if the right bidder is found offering the right price, the process will take at least three to four months to reach its logical conclusion. There is no way the airline can run for that long and wait for the new owner to pump in funds,” said a person in the know of developments.
Banks, on their part, are learnt to be acting cautious about putting in public money in Jet. They are seeing if Jet has some serious player interested in it, then they will pump in funds to keep it alive during the transition period. Otherwise their exposure to Jet will only mount. Air India is already there with over Rs 50,000-crore loan, they are unwilling to take another big hit and that too not on a PSU but a private company.
Tags: Jet Airways