- Earlier this month, Jet Airways defaulted on payment
- Airline denies cancellations are due to grounding of aircraft
- Talks on with Etihad Airways to source urgent funds: Sources
Crisis-hit private carrier Jet Airways has been forced to ground part of its 123-aircraft fleet following non-payment of dues to lenders, which has led to cancellation of some domestic flights, sources said. The airline however denies the cancellations are due to grounding of aircraft. The cash crunch has also pushed the airline to delay salaries for its employees and the airline, struggling with a debt of around Rs 700 crore, needs an urgent cash infusion to keep its operations going.
Earlier this month, the debt-hit airline had defaulted on its payment to a consortium of banks led by the State Bank of India. It also owes money to vendors and lessors.
The private carrier is exploring the possibility of turning some of its debt into equity with lenders like the State Bank of India. Talks are also on with shareholder Etihad Airways to source urgent funds through higher equity, sources said.
If the talks succeed, Jet's lenders, including the State Bank of India, could end up owning as much as 30 per cent, while Etihad Airways could increase its stake from from 24 per cent to more than 40 per cent if it injects more equity in the carrier, reported news agency Reuters.
Etihad, however, wants control over operations and want Jet Airways chief Naresh Goyal to give up controlling stake in the carrier.
Jet Airways would seek shareholders' nod to "convert the whole or part of the outstanding under loans, extended/to be extended by the lenders, into shares, or convertible instruments or other securities, of the company...," read a notice of the meeting submitted to the stock exchanges, reported news agency Press Trust of India.
Jet Airways has 123 aircraft on its fleet, including Boeing 737s and the recently acquired fuel efficient and modern 737 MAX aircraft, which it flies on domestic routes.