Debt-ridden Indian airline Jet Airways is facing serious operational issues, with 25 of its aircraft currently grounded on account of payment defaults to the carrier’s leasing companies.
Several other aircraft are also grounded due to maintenance, leading to the cancellation of an increasing number of flights in recent weeks.
“As of now 25 of our aircraft are grounded on account of payment issues with the leasing companies,” a Jet Airways spokesman told Arabian Business.
The airline said it will not be able to provide a number of grounded aircraft due to mechanical and maintenance issues as “it is a dynamic situation” changing from day to day.
“Aircraft grounded on engine related or other maintenance-related issues and brought back to commercial operations after fixing of the issues are a routine affair with airlines and therefore we do not report on such issues,” the Jet Airways spokesman said.
Jet Airways, in which Abu Dhabi-based Etihad Airways hold 24 percent stake, has a total of 119 aircraft, a large majority of which are on lease basis.
Jet Airways officials said the carrier has been actively engaged with all its aircraft lessors and regularly provides them with updates on the efforts undertaken by the company to improve its liquidity.
Restructuring plan
The officials said the airline was also making all efforts to minimise disruption to its network and is proactively informing and re-accommodating guests who are affected by the issue.
Sources close to Jet Airways said the grounding of aircraft by Jet Airway’s lessors have raised concerns on the SBI-led banking consortium to the airline taking any immediate action on its proposed financial restructuring plan for the carrier.
The bank-led restructuring plan for Jet Airways had envisaged conversion of banks’ debt into equity, besides other measures such as a mix of equity infusion and sale and lease back of aircraft owned by the carrier.
Sources said Jet management expected that the SBI-led bankers’ consortium would sound out the carrier’s aircraft lessors on their concerns on payment issues in view of the proposed restructuring plan and thus averted grounding of aircraft.
The decision of lessors to resort to impounding aircraft from Jet, even after the company’s majority shareholders approved the bank-led restructuring plans at the company EGM on February 21, is being interpreted as that the lessors were not assuaged on their concerns on immediate payments, these sources said.
Jet Airways officials said there have been talks of some ‘interim payment’ from SBI soon which could be used for paying pending salaries to its employees.
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