The once-mighty Indian carrier said in a statement Wednesday that it was suspending all flights after failing to secure emergency funding from the country’s banks.
“This has been a very difficult decision but without interim funding, the airline is simply unable to conduct flight operations,” Jet Airways said in statement.
Jet Airways said it was informed late Tuesday by a consortium of lenders, led by the government-run State Bank of India, that they would not be able to provide more cash.
The company described the suspension of flights operations as temporary, but the absence of funding puts more than 20,000 jobs at risk.
“Above all, the airline would like to express its sincere gratitude to all its employees and stakeholders that have stood by the company in these trying times,” it said in its statement.
Yet in recent years it struggled to cut costs to compete with newer budget airlines like IndiGo. Rising oil prices and the increased volatility of India’s currency, the rupee, only made matters worse.
Goyal stepped down in late March as part of a planned $218 million bailout that handed control to the banks. But that bailout did not materialize, with Jet Airways saying Wednesday the banks were “unable to consider its request” for funds to keep it flying.
The banks will continue their search for a private investor to buy 75% of the airline. The deadline for bids is May 10.
“We are actively working to try and ensure that the bid process leads to a viable solution for the company,” the consortium said in a statement shared by Jet Airways.
Etihad Airways, which acquired a 24% stake in Jet in 2013, has been touted as a possible buyer, but Abu Dhabi’s national carrier has problems of its own after losing about $4.9 billion in three years.
Etihad said it would support passengers affected by the suspension of flights.
“We continue to work with Jet management, lenders and key stakeholders in the context of the lender-managed effort to restructure the company,” an Etihad spokesperson added.
Swati Gupta and Zahraa Alkhalisi contributed reporting.
Source : Nbcnewyork