Debt-ridden Jet Airways Ltd is likely to ground a dozen aircraft in the next month mainly due to non-payment to lessors, a media report said.
The crisis-hit airline on Wednesday said seven aircraft were grounded due to non-payment of lease rentals. So far this month, as many as 13 planes of the company have been grounded on account of non-payment of rentals to lessors, according to a report in The Economic Times.
Jet Airways spokesperson, however, has denied The Economic Times report claiming that 40-odd aircraft have been and are in the process of being taken off the fleet. “Jet Airways clarifies that your information on the airline’s number of aircraft that stand withdrawn from operations as on date, due to various listed reasons, is incorrect,” the spokesperson was quoted as saying by the newspaper.
In a filing to the stock exchanges on Wednesday, the full-service airline said, "an additional seven aircraft have been grounded due to non-payment of amounts outstanding to lessors under their respective lease agreements".
The carrier is actively engaged with all its aircraft lessors and regularly provides them with updates on the efforts undertaken to improve its liquidity, the filing said. Faced with acute financial woes, the airline is looking to restructure its debt as well as raise funds.
On 23 February, the airline said an additional two planes were grounded. This followed an announcement made to stock exchanges on 7 February that it had grounded four of its aircraft on account of non-payment of lease rentals.
Jet Airways Wednesday also said it continues to provide required and periodic updates to the Directorate General of Civil Aviation (DGCA).
Jet has a fleet of about 123 mainly Boeing planes, including 16-owned aircraft. The rest are leased from many lessors including GE Capital Aviation Services, US-based BBAM and Japan’s SMBC Aviation Capital, according to a Reuters report.
On Monday, State Bank of India (SBI) said that reports suggesting it was considering taking heavily indebted Jet Airways Ltd to an insolvency tribunal to recover loans were “speculative”, and no such decision had been taken.
The loss-making airline approved a rescue deal in mid-February after months of crisis-talks to plug an 85 billion rupee ($1.2 billion) funding hole. The plan includes selling a majority stake to a consortium led by SBI, the airline’s biggest creditor, at 1 rupee.
Media reports on Monday said SBI planned to go to the National Company Law Tribunal (NCLT) to recover its loans from Jet as it felt the airline was running out of funds for operations.
“Reports have been appearing in the media about (a) decision taken by SBI to refer Jet Airways to NCLT. These are totally speculative and SBI would like to state that no such decision has been taken,” a spokesperson for SBI said.
Jet Airways also said that the media reports were “speculative”. Jet has been steadily losing market share to its rival and low-cost carrier IndiGo, which is owned by InterGlobe Aviation Ltd. The airline has also seen its share price suffer as it navigated through several negotiations with its lenders and shareholders.
Jet Airways shares fall by over 6%
Meanwhile, on Thursday, shares of Jet Airways fell by over 6 percent on Thursday after the company said seven more aircraft have been grounded due to non-payment of lease rentals.
Shares dropped 6.15 percent to Rs 211 on BSE. On NSE, the shares slumped 6.30 percent to Rs 210.15.
--With inputs from agencies
Your guide to the latest seat tally, live updates, analysis and list of winners for Lok Sabha Elections 2019 on firstpost.com/elections. Follow us on Twitter and Instagram or like our Instagram or like our Facebook page for updates from all 542 constituencies on counting day of the general elections.
Updated Date: Feb 28, 2019 12:41:58 IST