- Thursday, April 25, 2024
By: Radhakrishna N S
AIRCRAFT belonging to Jet Airways are being grounded in a row over mounting dues, a report said today (29).
Four or five aircraft have been grounded at airports across India on Monday (28), forcing the airline to cancel about 20 flights, the report said. Jet Airways’ Boeing 737 planes were were grounded at Delhi, Mumbai, Bengaluru, and Chennai airports as lessors started a repossession process.
The airline has been in talks with stakeholders, lenders, and others over the issue of sorting out delay in payment following a severe cash crunch.
Jet Airways is yet to disclose how many of its 123 aircraft fleet are operational.
Last week, Etihad Airways appointed turnaround specialist Alvarez & Marsal to conduct due diligence on Jet Airways as it weighed bailing out the cash-strapped Indian carrier, three sources familiar with the matter said.
Executives from Alvarez & Marsal are camped in Jet Airways’ offices in Mumbai and are taking stock of the airline’s operations and looking into its financial health and records, a source said.
The Abu Dhabi-based carrier plans to raise its stake in Jet Airways from the current 24 per cent but it wants the airline’s founder and chairman Naresh Goyal to give up control, sources said.
“Alvarez & Marsal are restructuring consultants. If they are there it means they are looking for stuff to cut,” said a second person who is familiar with the matter.
An Etihad spokeswoman declined to comment. Alvarez & Marsal did not immediately respond to an email seeking comment.
Jet Airways did not respond to an email seeking comment but said last week it is in talks with lenders to resolve its debt problems. It is seeking a cash injection by stakeholders and will make board changes.
Jet Airways, which controls a sixth of India’s booming aviation market, desperately needs a bailout. High fuel taxes, a weak rupee and price competition have squeezed profitability, leaving the airline with net debt of $1.13 billion.
Earlier in January it defaulted on a debt payment to a consortium of banks, led by State Bank of India (SBI), prompting ratings agency ICRA to downgrade the carrier.
The airline also owes money to employees, vendors and lessors – some of whom are considering taking back aircraft, sources told Reuters.
