Jet Airways was able to fly only five aircraft on Tuesday. (File)
Jet Airways today decided to temporarily suspend all operations, according to news agency Reuters. The move comes after lenders rejected its request for additional funds.
The airline was able to fly only five aircraft on Tuesday, the bare minimum required according to the rules of the Directorate General of Civil Aviation and conditions of the Air Operating Permit (AOP), the document that permits a commercial airline to operate across the country.
Here are the highlights on Jet Airways crisis:
A year ago Jet had more than 120 planes operating, but the full-service airline has been hit by competition from low-cost carriers such as IndiGo and SpiceJet, along with high oil prices, fuel taxes and a weak rupee.
Jet's creditors, led by SBI, want a new investor to acquire a stake of up to 75 percent and initial expressions of interest were submitted last week.
In a letter to employees, Jet Airways CEO, Vinay Dube said, "The Company, under guidance of the Board has reached out to our lead lender, State Bank of India yet again and stressed on the need for urgent funding requirements, critical to the continuation of the operations of our airline."
The pilots are also considering approaching the National Company Law Tribunal, in case there is no resolution to the current crisis. On Tuesday, 23 pilots quit the airline.
"I doubt if Jet Airways will continue operations tomorrow. Funding is very much important and whatever funding comes in, salaries have to be a part of that funding. The management has conveyed to us that whatever the figure it, it will include the salaries of all employees," Captain Asim Valiani, a senior pilot with the airline told NDTV.
Aviation experts say the Jet management underestimated low-cost carriers like IndiGo, SpiceJet and GoAir. They were offering tickets at a lower price. They also launched flights on new routes, but Jet focused on corporates.
Mr Goyal reportedly went ahead with the purchase despite being advised against it by his associates. His advisors said he was paying too much for Air Sahara, say reports
On Tuesday, Jet Airways founder Naresh Goyal, who along with his wife Anita stepped down from the airline's board last month, announced that he had decided not to bid for acquiring a stake in the cash-strapped airline.
The crisis at Jet has hit its employees hard with hundreds not getting paid for months. The pilots of the airline appealed to Prime Minister Narendra Modi this week, saying that 20,000 jobs were on the line if the airline went under.
According to the reports today, the lenders rejected Jet's request for Rs. 400 crore while trying to identify an investor willing to acquire a majority stake in the airline and attempt to turn it around.
Jet's creditors, led by SBI, want a new investor to acquire a stake of up to 75 percent and initial expressions of interest were submitted last week.
The crisis at Jet, which owes vast sums to suppliers, pilots lessors and oil companies, has deepened in recent weeks as its lessors have scrambled to de-register and take back planes, in a sign the bailout plan had failed to assuage their concerns.
Jet will be the seventh airline to go down since May 2014 and the 13th one after East West was shuttered.
The airline had already suspended its international operations till April 18 and it was operating only five planes, reported news agency Press Trust of India on Tuesday quoting Civil Aviation Secretary Pradeep Singh Kharola.
"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 tells news agency Reuters.
Two sources at state-run banks tell news agency Reuters that the lenders had rejected the Rs 4 billion ($58 million) that Jet Airways had sought to keep itself temporarily afloat, while its lenders attempted to identify an investor willing to acquire a majority stake in the airline and attempt to turn it around.