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Some lessors of Jet Airways have begun terminating lease deals over unpaid dues and are preparing to move the leased planes abroad, escalating a crisis for the cash-strapped carrier, five sources with knowledge of the matter told Reuters.
Two lessors have applied to the Directorate General of Civil Aviation (DGCA) to deregister at least five planes leased to Jet, three of the sources said.
Termination of lease agreements normally precedes applications made to the DGCA.
Jet has delayed payments to its pilots, suppliers and lessors for months and defaulted on loans after racking up over $1 billion in debt. While it is now meeting some of its payments, its survival hinges on emergency funding from PSU banks.
Aircraft grounding
Frustrated by the unpaid dues, Jet’s lessors, including many of the world’s biggest players such as GE Capital Aviation Services (GECAS), Aercap Holdings and BOC Aviation, have already taken control of some their planes, sources said, leading to the grounding of nearly a third of its 119 aircraft fleet. Once the planes are deregistered, they can be taken out of the country and leased to other airlines.
One of the sources with direct knowledge of the matter said that of the planes being deregistered, two are potentially being flown to China and one to Ireland.
Another industry source said GECAS and Aercap had filed an application to deregister a total of five planes.
Lease terminations could hit the already fragile confidence of business partners of Jet.
Jet did not respond to requests for comment. AerCap declined to comment and there was no immediate response from GECAS to a query sent outside normal business hours.
Our Mumbai Bureau reports: The DGCA has clarified that it has not asked Jet Airways to stop taking advance bookings.“We do not have any such proposal. We shall continue to share relevant information with you all,” it said. Yesterday, PTI had reported, quoting a government official, that the government watchdog could bar Jet from taking advance bookings beyond a particular period amid reduced capacity and massive flight cancellations. The airline has also denied the report.
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