Airline Karma: Mallya extends sympathies on Jet Airways crisis

Jet Airways

The airline was once India's second-biggest by market share but is on the brink of collapse with debts of more than $1 billion.

The Jet Airways statement continued: "Over the last several weeks and months, the company has tried every means possible to seek both interim and long-term funding". Further, Jet Airways in a regulatory filing said that in view of the critical liquidity position, its operations have been severely impacted and its awaiting emergency funding from lenders in this regard. Jet Airways said that it has informed the Directorate General of Civil Aviation, and the Ministries of Civil Aviation and Finance and other relevant government institutions, of this course of action.

The airline said the decision follows the lenders refusing to offer a lifeline.

Jet, which did not respond to requests for comment, saw its shares fall by as much as 18.5 percent on Tuesday after Indian media reported that Jet's management had advised the airline's board to temporarily suspend the company's operations. In a series of tweets, Mallya drew parallels between debt-ridden Jet Airways, Air India and Kingfisher Airlines.

But the immediate worry is the lack of funds to keep the company afloat.

EXIM did not respond to a request for comment.

He alleged that his debtors have refused to take him up on his offer.

The SBI-led consortium is looking for a buyer for Jet and a deadline passed on Friday for prospective bidders to express an interest in acquiring a 75% stake in the carrier. There has been a backlash on social media about Jet Airways' financial problems.

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Jet will be forced to shut down as soon as Wednesday if it does not get emergency funding from its lenders, two sources familiar with the matter told Reuters on Tuesday.

These include private equity firms TPG Capital and Indigo Partners, Indian sovereign wealth fund National Investment and Infrastructure Fund (NIIF), and the UAE's Etihad Airways, which already owns a minority stake in Jet, it said.

Separately, an Indian government official said funding was likely to come through and that the banks were not looking to take Jet to bankruptcy court.

According to NAG, which has around 1,100 members, the airline is only operating around 450 seats per day.

This comes after the airline had already grounded most of its fleet and temporarily cancelled large amounts of flights, including all global services. Due to this, the airline has neither been able to pay pending salaries nor its lessors and, hence, been forced to ground the bulk of its planes.

Jet's pilots along with engineers and senior staff were last paid for December 2018.

Shares in the company, which have tumbled about 60 percent in the a year ago, closed on Tuesday at 240.50 rupees a share.

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