6 April 2019: A solution to its financing crisis continues to evade Jet Airways, with its lenders yet to infuse any significant capital.
On Friday, Indian Oil cut fuel supplies for a few hours over unpaid bills. Some lessors have also sought deregistering of grounded planes in order to fly them out of the country. IOC did not give details of the airline’s dues. India’s biggest oil marketing company cut off supply round noon, and resumed only around 6pm after it was assured of payment.
“Jet fuel supply has been restored,” an airline spokesman said. Jet is operating with only 26 aircraft, against its original fleet strength of 119 planes.
Lenders did not indicate why the proposed cash infusion of Rs 1,500 crore has not yet taken place. Last month, SBI and PNB had agreed to infuse Rs 1,500 crore subject to promoter Naresh Goyal stepping down and reducing his stake, banks getting a 51% stake in exchange for Re 1, and SBI and PNB getting specific security for the emergency funding.
Etihad Airlines, Jet’s partner and a potential buyer, held talks with SBI on Friday, but no deal was announced. According to a bank official, Etihad had earlier placed several conditionalities for acquiring Jet, most of which were beyond the powers of lenders. It is not clear where the restructuring plan has got stuck, but banks have invited bids for expressions of interest from potential buyers up to April 9. There are some indications that lenders are not as confident of a sale as they sounded last month.
On Thursday, SBI said that while all efforts will be made for the stake sale, other options may be considered if sale efforts don’t produce the desired result.
Last month, SBI chairman Ranish Kumar had come out strongly against insolvency proceedings for an airline, saying it would result in grounding its operations. However, now some lenders are not ruling out any eventuality.
Meanwhile, some lessors are learned to have applied to the Directorate General of Civil Aviation (DGCA) to de-register planes that have already been grounded, while others are expected to follow. This would enable them to fly the planes out of the country and deploy them elsewhere. Till now, aircraft were grounded as there was a feeling Jet may get funding. But lessors are increasingly getting restless and want their planes to be rented out to others.