Jet makes Rs 400-crore SOS call, banks weigh options

Jet Airways’ lenders, led by State Bank of India, met senior officials of the finance ministry on Tuesday to discuss ways to bail out the airline with temporary funds.

Published: 17th April 2019 09:38 AM  |   Last Updated: 17th April 2019 09:38 AM   |  A+A-

Jet Airways flights parked at IGI airport in New Delhi | SHEKHAR YADAV

By Express News Service

NEW DELHI/MUMBAI: Jet Airways’ lenders, led by State Bank of India, met senior officials of the finance ministry on Tuesday to discuss ways to bail out the airline with temporary funds.
Civil Aviation Secretary Pradeep Singh Kharola said the Jet management sought interim funding, but lenders were yet to take a call. Unconfirmed reports said Jet Airways requested at least Rs 400 crore from lenders. 

There was also some buzz on Jet promoter Naresh Goyal backing out of earlier plans to bid for his own airline. But SBI Capital Markets, which is managing the bidding process for the stake sale, is yet to make any formal announcement or share the names of bidders. To control the airfare spike, the Directorate General of Civil Aviation urged all airlines to reduce it on 10 routes. 

DGCA asks airlines to keep fares in check

As airfares soar and flights get cancelled, aviation regulator Directorate General of Civil Aviation (DGCA) on Tuesday asked airlines to reduce fares on ten high-density domestic routes to “reasonable levels”. 
A senior official at DGCA said that ticket prices on high-density routes have increased up to 30 per cent over the last one month. 

Civil Aviation secretary Pradeep Singh Kharola said that the aviation ministry will also convene a meeting of airlines and airport representatives over capacity expansion and airfare issues on April 18. 
Kharola also noted that 90 per cent of Jet’s slots which are not being used were being temporarily distributed to other airlines, going on to add that around 21 planes are expected to be added to the fleet of domestic carriers by the end of next month. 

Together, there would be a good number of additional planes to meet the peak season demand, he said.
Some of the airlines are also in discussions with lessors to take on Jet Airways’ deregistered aircraft. 
For instance, SpiceJet had recently announced that it would induct 16 Boeing planes which were used by Jet Airways earlier.

Earlier in the day, Civil Aviation Minister Suresh Prabhu had called for a review of issues related to the struggling Jet Airways, including rising fares and flight cancellations. “Directed Secretary @MoCA_GoI to review issues related to Jet Airways, especially increasing fares, flight cancellations etc,” Prabhu said in a tweet.

Reeling under a debt of over Rs 8,000 crore, Jet Airways has grounded almost its entire fleet and is currently operating only five planes, according to civil aviation officials. 
The airline’s management has sought funds from lenders to remain operational, but the creditors are yet to finalise any such plan. Unconfirmed reports, however, said that Jet Airways has requested the release of at least Rs 400 crore from lenders. Jet CEO Vinay Dube is believed to have written a letter to chief lender SBI in this regard. 
The management has also reportedly warned lenders that it has board’s approval to halt all operations if lenders don’t agree to finance.

In a filing to BSE, Jet Airways reacted to queries from the stock exchanges on a media report that said it would “temporarily shut down its operations” stating it is awaiting emergency liquidity support from the lenders consortium. It noted that operations have been severely impacted and added  that its leadership “is engaged with lenders in connection with the said emergency funding request to arrest a further deterioration of its services and minimize inconvenience to its guests.”

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