Mumbai: With lessors grounding more Jet Airways (India) Ltd planes, the airline suspended all of its international flights till Friday morning, even as a government official said the airline’s eligibility to fly abroad might be reviewed given that its fleet size had fallen below the required minimum. All international flights had been cancelled till Friday morning, said a Jet Airways spokeswoman.
The airline informed the stock exchanges on Thursday that lessors had grounded 10 more of its planes, bringing its fleet strength down to 14. This is below the minimum 20 planes required to operate international flights, and a fraction of the 119 aircraft it flew before its first default on 31 December.
According to a second official, the ministry has sought a report from aviation regulator Directorate General of Civil Aviation (DGCA) on the current fleet size of Jet Airways. Both officials declined to be identified.
Salaries to a section of the airline’s staff, including pilots, engineers and general managers, have remained unpaid since January.
The airline has also deferred interest payments to banks and dues to fuel suppliers.
A DGCA spokesperson didn’t respond to repeated calls on his mobile phone.
Queries sent to Jet Airways seeking information on fleet size and the sustainability of its international flights remained unanswered.
Meanwhile, Jet Airways founder Naresh Goyal pledged about 26% stake in the airline as security for loans from Punjab National Bank, the airline said in a separate statement to BSE. It said Goyal had pledged over 29.5 million shares amounting to a 26.01% stake. Goyal owned 51% in Jet Airways at the end of 31 December, according to the latest company filing with stock exchanges.
A State Bank of India (SBI)-led lenders’ consortium took control of Jet Airways in late-March, promising to throw open a bidding contest for a new investor that is expected to be completed in the current quarter.
The lenders had in February agreed to convert a part of Jet Airways’ debt into equity by agreeing to take a 50.5% stake in the carrier, nominate two board members and make cash infusion of about ₹1,500 crore into the airline.
However, the lenders are yet to convert their debt into equity. The Supreme Court had earlier this month quashed the Reserve Bank of India’s 12 February 2018 circular, which prescribed rules for recognizing one-day defaults by large corporates and called for insolvency action as a remedy.
The circular had directed lenders to refer any loan account over ₹2,000 crore under the bankruptcy code if it was not resolved within 180 days of default. As of 30 September, the airline’s net debt was ₹8,052 crore.
The SBI-led consortium oversaw the exit of Naresh Goyal and his wife Anita from the board of the airline. The lenders originally set 10 April evening as the deadline for submitting expressions of interest (EoIs) to buy a controlling stake of up to 75% in Jet Airways. This has been extended to 12 April.
Mint reported on 10 April that private equity firms TPG Capital and Indigo Partners, National Investment and Infrastructure Fund Ltd and current Jet Airways shareholder Abu Dhabi-based Etihad Airways PJSC had submitted their EoIs, citing an unidentified person.
On Thursday, Jet Airways shares fell 1.14% to ₹260.40 apiece on the BSE, while the benchmark Sensex rose 0.06% to end the day at 38,607.01 points.