28 February 2019: As lenders and promoter Naresh Goyal continue to disagree on the terms of recapitalisation of Jet Airways, the airline is sliding slowly deeper into distress every day. The airline, which started the winter schedule with 103 planes, is now down to 83.
Dublin-based aircraft lessor AerCap has issued a termination notice for at least two Boeing 737 aircraft, said people in the knowledge of the development. This is the first instance when a lessor has terminated the lease agreement with the financially distressed carrier.
GECAS, GE Capital’s leasing firm, too, has stopped delivery of Boeing 737 Max.
The sources said that lessors were getting impatient after the company failed to furnish a repayment plan by 21 February as proposed earlier. “Jet Airways hasn’t paid lease rental for the last five months. In January, the management led by Naresh Goyal had said a firm payment plan would be submitted by February 21 but that didn’t happen, following which multiple lessors grounded the planes. Other lessors also are likely to process termination,” said a person aware of the development. He added that five more planes are likely to be grounded by the first week of March, bringing down the fleet size to 78.
According to the airline’s disclosure to the stock exchange, around 15 planes have been grounded by lessors due to non-payment. Jet Airways has been forced to cancel at least 90 flights from its bigger hubs in Mumbai, Delhi and Bengaluru. These include international flights to Dubai and Singapore.
In response to a query, a Jet Airways spokesperson refused to comment on the number of operational aircraft but accepted that the airline has readjusted its network due to the grounding of planes. “Jet Airways cannot comment on individual relationships. Jet Airways has proactively undertaken certain adjustments to its flight schedule, keeping in mind the likely yet interim non-availability of some aircraft in its fleet in the foreseeable future,” the spokesperson said.
A senior official of the Directorate General of Civil Aviation (DGCA) said that the airline has requested to cut multiple flights for which permission has been given. “Looking at the current situation, the DGCA has agreed to allow Jet Airways to fly a truncated schedule. If we don’t allow the airline to take forward bookings, the company will die which no one wants,” he said.
Running out of fuel
Jet started winter schedule with 103 planesCurrently, the airline is operating 83 aircraftAround 15 planes have been grounded by lessors due to non-payment The company was unable to give payment plan by February 21.