The fate of crisis-ridden Jet Airways remained uncertain on Monday with the airline defaulting again on interest payment to its debenture holder owing to financial constraints and grounding four more planes.
On the other hand, the airline, which is yet to arrive at an agreement with its partner Etihad and lenders on bailing out the cash-strapped airline, has sought a “further short time” to conclude the deal.
“The complexity of the process though has led to some delays and will require a further short time to conclude. I once again assure you that I am personally committed to have the process completed as soon as possible and restore much needed stability to our operations at the earliest. Meanwhile talks with our strategic partner Etihad Airways and lenders led by SBI are ongoing. We are in constant dialogue with them,” Jet Airways chairman Naresh Goyal said in a letter to the employees on Monday.
“The payment of interest due on 19 March, 2019 to the debenture holder will be delayed owing to temporary liquidity constraints,” the carrier said in a stock exchange filing. Etihad, which was dithering on injecting more funds into Jet Airways, is not comfortable with some of the terms and conditions of the bailout plan, said a banking source. “Banks are keen that Etihad should come up with a workable plan involving fund injection at the earliest.”
Meanwhile, Etihad Airways is also facing the biggest crisis in its history after the company reported a loss of $1.8 billion for the third consecutive year. The Abu Dhabi based company said in a statement that total revenues fell by 2.4 per cent in 2018 to reach $5.86 billion, down from $6 billion in 2017.
Jet Airways grounded four more planes on Monday, taking the number of aircraft that are non-operational due to non-payment of lease rentals to 41. This effectively means more cancellations in the coming days. “An additional four aircraft have been grounded due to non-payment of amounts outstanding to lessors under their respective lease agreements,” the airline said.
The company is actively engaged with all its aircraft lessors and regularly providing them with updates on the efforts taken to improve the liquidity, it said.
“Aircraft lessors have been supportive of the company’s efforts in this regard,” it said, adding that all efforts are being made to minimise disruption to its network.
In the communication to employees on Monday, Goyal said talks with the airline’s strategic partner Etihad Airways and State Bank of India -led lenders are going on.
On February 14, the board of the company had approved a bank-led resolution plan, whereby the SBI-led consortium of lenders will become the largest shareholders in the airline and Goyal would exit the management as the chairman and board member.
If the resolution plans goes through, banks would convert a part of their debt into 11.4 crore shares for a consideration of Re 1 as per the Reserve Bank of India norms. Last week, SBI sounded hopeful of reaching an early solution by this week.
“While our discussions with our lessors continue and we keep them updated at all times, as a responsible airline we have consciously and proactively decided to curtail our schedule and network according to the number of aircraft we are currently operating. This will ensure the sanctity of our schedule, while keeping the regulatory authorities briefed,” Goyal said.
“I am fully committed to ensure that your deferred salary dues are cleared on priority once all parties sign off on the Resolution Plan and I recommit to you my best and most strenuous efforts 24×7 towards this end. I am also fully committed to keep our communication lines open and look forward to reverting with more information in the near future,” Goyal said, assuring the employees.