India’s beleaguered Jet Airways has halted all operations after failing to secure funding from lenders, leaving it teetering on the edge of bankruptcy.
In a message from the CEO, the airline sent out the difficult communication that effectively shut off the lights for India’s largest privately owned airline.
“It is with deep sadness and with a heavy heart that we would like to share with you that, effective immediately, Jet Airways will be suspending all its domestic and international operations,” the airline’s message posted. “Late last night we were informed by SBI, on behalf of the consortium of Indian lenders, that they are unable to consider our request for interim funding. Since no emergency funding from the lenders or any other source of funding was forthcoming, it would therefore not have been possible for us to pay for fuel or other critical services to keep the operations going. Consequently, with immediate effect we are compelled to cancel all our domestic and international flights. This decision has been taken after painstaking evaluation of all alternatives and after receiving guidance and advice on the same from the Board of Directors of Jet Airways.”
The airline has been seeing deep financial troubles for months and has been operating with only around dozen aircraft of a fleet that once flew more than hundred aircraft on international routes. Indian regulations require an airline to have a fleet of at least 20 aircraft for it to operate internationally. Flights to London, Paris, and Amsterdam were cancelled and passengers were left to rebook where they could.
Saddled with more than $1.2bn in debt, the airline reportedly owes money to banks, pilots and suppliers. Etihad purchased a quarter stake in the airline in 2013 and the $35 million infusion helped keep life at Jet Airways afloat for a few more years. But the advent and success of low-cost carriers competing on similar routes required Jet to have to lower prices when services were still expensive. Facing ever higher fuel prices and hefty taxes, the airline had to seek more support from financial arrangements that, in the end, were not forthcoming.
A New York Times report notes how Naresh Goyal, a former travel agent, founded Jet 26 years ago and built it into India’s largest carrier by offering travelers a modern, efficient alternative to the poor service and unreliable schedules of India’s government-owned carriers. But as a new crop of discount airlines emerged, Mr. Goyal failed to adapt and instead borrowed heavily in an attempt to maintain Jet as a high-end carrier.
Jet’s note from the CEO, now posted on the company website, addresses the sudden flight cancellations and the effect on passengers, and even offers a glimmer of hope that the airline may someday fly again.
“For assistance, essential services needed to support our guests and the re-commencement of the flight operations will be kept onboard until further notice. Guests who are booked on our flights with travel on future dates will be informed via text message email or phone call to the contact details listed in the booking. Guests who are impacted by the temporary suspension of flight operations can click here to request for a refund for their confirmed bookings.
“We sincerely and profusely apologize for the disruption to your travel plans. We would like to thank you for your continued patronage, support and loyalty over the years.”