18 Apr Jet Airways Halts Operations
India’s oldest private airline makes the decision to suspend all of its flights as it runs out of cash to keep themselves in the business.
Yesterday, banks refused funds to keep Jet Airways afloat. With lenders to Jet, unwilling to pump in the promised Rs.1500 crores(1500 million), which they had said that they would do; the airline is now heading to an imminent closure. It immediately needs Rs.1000 crore to merely stay afloat and to sustain the airline till a new buyer comes on board. Jet has no funds to pay for its operational costs and has suspended all international flights and has a mere 7 planes are now flying out of its earlier fleet of 119.
The worst affected are the 20,000 employees of Jet Airways, who have not been paid their salary since months. While the PMO is said to be monitoring the crisis, its pilots have pleaded intervention of the PM, in order to save the airline. Any buyer will need to pump in at least Rs.15,000 crores in order to revive the airline, which appears to be a steep price for an airline with numerous legacy issues of financial mismanagement, siphoning of funds, unknown liabilities and lapses in governance and regulatory compliances.
The entire saga of Jet Airways and its likely closure, has been a tale of mismanagement, not just by the promoter Naresh Goyal, but also by the banks themselves who have a combined exposure of over Rs.8,000 crores in an airline, which has recorded a profit only twice in the last 12 years and continues to bleed cash copiously.
The most preferred Airline of India lies grounded with uncertainty now.