Jet Airways grounds seven more aircraft as the carrier fails to make payments to its lessors

Aircraft lessors have been supportive of the company's efforts to improve its liquidity, Jet Airways said.

FP Staff February 28, 2019 07:22:08 IST
Jet Airways grounds seven more aircraft as the carrier fails to make payments to its lessors
  • Saddled with a billion dollars in debt, Jet has defaulted on loans and has not paid pilots, leasing firms and suppliers for months

  • The Naresh Goyal-founded airline has 1,600 pilots, over 1,100 of whom are unionised and represented by the NAG

  • Jet Airways domestic pilots body, National Aviators Guild (NAG), has deferred its proposed agitation from next month

Debt-ridden Jet Airways Ltd said on Wednesday it grounded seven more aircraft as the carrier failed to make payments to its lessors.

Aircraft lessors have been supportive of the company's efforts to improve its liquidity, Jet Airways said.

Saddled with a billion dollars in debt, Jet has defaulted on loans and has not paid pilots, leasing firms and suppliers for months.

"As mentioned earlier, the Company is actively engaged with all its aircraft lessors and regularly provides them with updates on the efforts undertaken by the Company to improve its liquidity," the airline said in a statement issued to stock exchanges.

International lessors had grounded many Jet Airways planes before potentially moving them out of India, as skepticism built over whether the bailout of the carrier can clear their dues on time.

Earlier in the day, the airline cancelled multiple flights for 28 February due to operational issues. "As per instructions from Delhi ATC regarding airport closure, flight operations to / from Amritsar, Chandigarh, Jammu, Leh and Srinagar have been suspended until further notice," Jet Airways said.

Jet Airways grounds seven more aircraft as the carrier fails to make payments to its lessors

Representational image. Reuters

According to Moneycontrol, Jet Airways may have to ground 42 of its aircraft by the end of the month.

Meanwhile, Jet Airways domestic pilots body, National Aviators Guild (NAG), has deferred its proposed agitation from next month in view of the developments on the nation's Western borders.

The Naresh Goyal-founded airline has 1,600 pilots, over 1,100 of whom are unionised and represented by the NAG. Pilots had on Monday said that they would not perform additional duties and wear black bands from March to protest against salary delays.

The airline has been delaying salaries to its pilots along with engineers and senior management since last August.

Jet Airways has a debt of nearly Rs 8,200 crore and needs to make repayments of up to Rs 1,700 crore by March-end. In the three months to December 2018, the airline reported the fourth consecutive quarterly net loss of Rs 732 crore. Due to the liquidity crunch, the airline has defaulted on payment of principal and interest to a consortium of domestic banks besides payments to lessors and a section of employees.

On 14 February, the airline board approved a bank-led provisional debt resolution plan, whereby lenders would become the largest shareholders in the airline owning up 51 percent equity. But the plan is yet to get the final nod.

Its shareholders had last Thursday also approved conversion of debt into equity and other proposals during the extraordinary general meeting.

Jet has a fleet of about 123 mainly Boeing planes, including 16-owned aircraft. The rest are leased from a range of lessors including GE Capital Aviation Services, U.S.-based BBAM and Japan’s SMBC Aviation Capital, sources have said.

With inputs from agencies

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