Logistics

Four Jet Airways aircraft grounded due to non-payment

Forum Gandhi Mumbai | Updated on February 08, 2019

Debt-laden Jet Airways has been forced to ground four aircraft. Representative image.   -  Reuters

The airline owes money to its pilots, lessors, banks and vendors

The problems for the debt-laden Jet Airways seem to intensify as it has been forced to ground four aircraft on account of non-payment of outstanding amount as per lease agreement. The Naresh Goyal-led airline informed the same in a stock exchange filing late night on Thursday.

The company further said that it is “actively engaged with all its aircraft lessors and regularly provides them with updates on efforts undertaken by the company to improve its liquidity. Aircraft lessors have been supportive of the company's efforts in this regard. The company is making all efforts to minimise disruption to its network due to the above and is proactively informing and re-accommodating its affected guests.”

“Further to our news clarification letter dated 30 January 2019, we inform you that three aircraft that were grounded for engine normaliszation are back in commercial operations,” said the statement signed by Kuldeep Sharma, vice president - Global Compliance and Company Secretary. “The Company is making all efforts to minimise disruption to its network due to the above and is proactively informing and re-accommodating its affected guests,” the company added.

According to reports, the airline on January 30 had faced some disruptions and cancellations of flight as the Irish-American commercial aviation financing and leasing company GE Capital Aviation Services (GECAS), had grounded six aircraft for non-payment of dues.

In a BSE filing, the airline had clarified that its operations were due to a scheduled termination of an aircraft lease and for carrying out an engine normalisation exercise. The airline said that the cancellation of a few of its flights is of a temporary nature and not related to the ongoing financial crisis.

The airline owes money to its pilots, lessors, banks and vendors. Its problems have been exacerbated by higher oil prices and intense pricing competition in the domestic market. Jet Airways had also delayed the payment of interest and principal instalment due on December 31 to its lenders.

The airline has loans of over ₹8,400 crore, with SBI being its biggest lender. SBI’s exposure is said to be close to ₹2,000 crore. In a bid to solve things between lessors, lenders and Jet Airways, SBI had in a meeting asked the airline to propose a restructuring plan. The key issue is whether Naresh Goyal continues as the promoter of the company or the lenders will take full control. Goyal had proposed to infuse ₹700 crore if he is allowed to remain as the promoter.

Published on February 08, 2019

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