The second biggest airline in India has grounded all of its planes after emergency funding from investors and lenders failed to cover the company’s $1.2 billon debt.
A rescue deal was agreed at the end of March but Jet Airways was denied a loan of $217 million from its investors, pushing the company further to the brink.
The emergency funding would have gone towards paying for fuel and other services crucial to keeping the airline running. With funding denied, the organization had no choice but to ground all planes.
A statement released by the airline said “Jet Airways is compelled to cancel all its international and domestic flights. The last flight will operate today,” a decision that would be effective “immediately”.
Jet Airways is the second largest airline company in India in terms of market share. It employs over 20,000 people and
The airline said it was forced to take the step as a consortium of lenders had turned down its request for emergency interim funding.
Without the funding, the airline would not be able to pay for fuel or other critical services to keep operations going.
The company, which until November was India’s second-biggest airline by market share. It employs more than 20,000 people and at its height was running 600 flights a day. Now it owes massive debts to oil companies, pilots, lessors, and suppliers, debts which have only gotten worse in recent weeks.
Lessors have already begun repossessing Jet Airways aircraft in an attempt to reclaim the vehicles and lease them to other airlines.
As for the Jet Airways employees, things remain grim. Many haven’t been paid in months and are worried they never will see another paycheck.
Some are hopeful that their loyalty and many years of service will be rewarded eventually, though they may have to wait a little bit longer. Jet Airways is currently up for auction and the outcome will determine the fate of its employees and its future as an airline.