Jet Airways announces ‘temporary suspension of operations’ after banks reject emergency funding

While the airline had sought Rs 1,000 crore, it was hopeful that banks would extend Rs 400 crore as emergency funding to keep the airline flying.

Embattled carrier Jet Airways Ltd has announced a “temporary suspension of operations” after the consortium of banks led by SBI rejected their request for emergency fund infusion in the airline. The consortium refused to provide Jet Airways with the Rs 400 crore in emergency funds that the airline was seeking to stay operational.

“Since no emergency funding from the lenders or any other source is forthcoming, the airline will not be able to pay for fuel or other critical services to keep the operations going. Consequently, with immediate effect, Jet Airways is compelled to cancel all its international and domestic flights,’ said Jet Airways in a release.

The last flight will be from Amritsar to Mumbai at 10.30 pm tonight.

“This has been a very difficult decision but without interim funding, the airline is simply unable to conduct flight operations in a manner that delivers to the very reasonable expectations of its guests, employees, partners and service providers,” said Jet Airways.

The airline had earlier said it was talking to its lenders for emergency funding to “arrest further deterioration of its services”.

Airline sources had told The Indian Express that while the company has sought Rs 1,000 crore, they are hopeful that banks will extend Rs 400 crore immediately to keep the airline flying.

Lenders, however, are divided on giving more funds to the airline, said a banking source. “While four banks have agreed to extend funds, four have opposed the proposal,” an official had told The Indian Express.

The airline has already suspended all its international operations until April 18. It is currently operating with just five aircraft.

Some banks had earlier expressed the opinion that they were throwing good money after bad money as the revival of the airline, which has no tangible assets, has become more difficult. Besides, there is an opinion that Rs 1,500 crore may not be enough to keep the airline running until a new promoter or investor is selected. Officials of banks had met Monday but deferred any decision on pumping money into the airline.

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