Jet Airways may ground operations as banks refuse emergency funds

Jet Airways

India's Jet Airways to suspend all operations after banks reject funding request

"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. and has made a decision to go ahead with a temporary suspension of operations", the airline said.

"This has been a very hard decision but without interim funding, the airline is simply unable to conduct flight operations in a manner that delivers to the very reasonable expectations of its guests, employees, partners and service providers", Jet said in the statement.

"If we don't get funds today, the airline will have to shut down immediately", a senior company source told Reuters.

"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". This was the second time in less than a week that Prabhu has publicly said he has called for a review of issues related to Jet Airways. Among the other things discussed were the steadily increasing fares on other airlines and flight cancellations with Jet Airways steadily reducing its operations. "Interim funding has not been forthcoming thus far, & as a result of this we have extended cancellation of worldwide operations through Thursday, April 19".

Jet, which has around US$1.2 billion in bank debt, has been teetering for weeks after failing to receive a stop-gap loan of about US$217 million as part of a rescue deal in late March.

In the past few weeks, Jet Airways has been grounding planes as lessors have moved to de-register and take back their aircraft, even though the company's lenders have sought expressions of interest from potential investors in the company. Initial expressions bids were submitted last week. Punjab National Bank (PNB) Managing Director and CEO Sunil Mehta said discussions were on to provide interim funding. "SBI is working on the emergency funding, everything is under discussion, nothing is finalised". "If the flights won't be operational how do i claim my refund?"

CNBC-TV18 said Jet's lenders were likely to invite binding bids from four shortlisted suitors.

Jet Airways will now await the bid finalisation process by SBI and the consortium of Indian Lenders. "Why don't Banks take the money I offered first?" he went on to add.

Bad investments, competition from several low-priced carriers, high oil prices and a weak rupee have led to Jet's current financial predicament, analysts say.

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