Jet suspends foreign flights till Monday, PMO calls meeting

The carrier, saddled with more than $1.2 billion of debt, has had to ground more than 80 percent of its fleet over unpaid dues to leasing companies, pushing it to the brink of shutdown and jeopardising hopes of attracting a new investor. Government officials have previously expressed concern about the loss of jobs at the airline and on the prospect of higher Indian air fares if Jet Airways collapses.

Jet’s lenders, led by State Bank of India, are still trying to seek expressions of interest in the carrier from potential investors.

The banks have received initial bids from five to six companies, it was reported, citing sources. Nripendra Mishra, the principal secretary to Prime Minister Narendra Modi, chaired the meeting, which had the aviation regulator and civil aviation secretary Pradeep Singh Kharola.

Kharola said the company had money to operate only 6-7 aircraft over the weekend and after that the lenders would have to decide how many aircraft the airline could operate beyond Monday afternoon.

Kharola said the company will meet bankers on Monday for infusion of funds in the interim.

Earlier on Friday, hundreds of Jet’s employees marched from the airport to the airline’s headquarters in Mumbai to seek clarity on whether they will get paid soon and if their jobs will be secure over the coming months. Air fares have increased across India in the last few weeks due to sharp decline in number of flights primarily caused by grounding of around 90 per cent of Jet’s 119-aircraft fleet.

On Thursday, the airline had announced temporary grounding of its international operations for day-Jet was the largest international airline from the country till the financial crisis--when it had also suspended operations to the entire Eastern and Northeastern markets as Jet was forced to ground 10 more aircraft following default of lease rentals.

This has left Jet with no large aircraft while it had just 14 planes for domestic operations as of late Thursday, way down from 123 planes in operations till a few months back. “Jet has decided to extend suspension of its international operations till Monday, due to severe cash crunch,” airline sources said.

Of the 14 aircraft, eight were wide-body B777s (seven) and an A330 – generally used for long-haul international operations. The remaining six planes were, three B737s, which are largely used for flying on domestic routes besides on short- haul international destinations and the rest three are regional ATRs. The government rules stipulate an airline must have at least 20 planes for operating international operations.