Economy

Cash-strapped Jet Airways to suspend operations from tonight

Cash-strapped Jet Airways to suspend operations from tonight

Soon after embattled carrier Jet Airways made a decision to temporarily suspend all operations starting Wednesday night, a wave of sympathy followed on social media.

Jet Airways had requested its lenders for aditional Rs 400 crore but it was rejected. Hence the government has decided not to meddle in the carrier's affairs and let the lenders take a call. "The last flight will operate today [Wednesday]".

"Since no emergency funding from the lenders or any other source is forthcoming, the airline will not be able to pay for fuel or other critical services to keep the operations going", it said in a statement.

The airline, which has a huge debt pile on its books, is in the midst of a stake sale process with bids being scrutinised for the final round.

The airline is now operating only five planes from 123 aircraft in the fleet till last December.

Jet, which has been facing financial troubles for over a year now, owes its lenders Rs 8,000 crore rupees.

The airline will now await the bid finalisation process by SBI and the consortium of Indian lenders, Jet said, adding that it will continue to support the bid process initiated by the banks.

Bankers and an Indian government official said lenders are trying to line up funds to keep aloft the once-dominant Indian airline, whose shares earlier on Tuesday slumped to their lowest levels since August 2015.

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The UK's Civil Aviation Authority tweeted advice to customers, outlining different approaches for seeking refunds depending on how the flight was booked.

"Unfortunately, despite its very best efforts, the airline has been left with no other choice today but to go ahead with a temporary suspension of flight operations".

Stewardesses from Jet Airways (L) and Etihad Airways listen to a news conference by Naresh Goyal, chairman of Jet Airways and James Hogan, chief executive of Abu Dhabi's Etihad Airways, (both not seen) during a news conference in New Delhi July 23, 2014. In order to operate on global routes, any Indian airlines needs to have 20 planes in operations at any given time.

Mehta's comments come after Jet informed all employees in a letter on Monday it was extending a suspension of global flights until Thursday due to a lack of funds.

On March 25, 2019, a consortium of Jet Airways domestic lenders, led by State Bank of India, became the majority shareholders and took a transient control of the airline, until a suitable investor is found.

A collapse of Jet, and the loss of more than 20,000 jobs, would deal a blow to Prime Minister Narendra Modi's pro-business reputation as he seeks a second term in ongoing national elections.

It has repeatedly defaulted on loans and failed to pay staff in recent months.