Senior airline officials are still engaging with lenders in hope of interim funding.
In a drama that moved from the boardroom of Jet Airways headquarters in Mumbai to the corridors of Ministry of Finance in New Delhi, the final act is yet to be played out in the airline's saga.
Jet is yet to make a statement after its board met on April 16 to discuss the future course for the distressed airline. On April 15, the banks, after a meeting with Jet officials, had refused to provide interim funding to the airline.
The airline was hoping to get about Rs 1,000 crore from the banks, and that would have enabled it to continue operations until a new owner came in. SBI Caps, which is overseeing the bidding process, is expected to announce the shortlisted candidates who can then present bids.
Naresh Goyal, who had submitted an expression of interest, is said to have opted out of the race, after opposition from other suitors, including Etihad Airways.
The Board had few options to consider, and thus may be forced to suspend, at least temporarily, operations of the airline. Jet is operating about 50 flights a day, with seven aircraft. It has suspended international flights till April 18.
It needs immediate funds to pay its employees - including pilots and ground staff - lenders, lessors and vendors.
The company on April 16 wrote to the Prime Minister's Office, Ministry of Finance and Ministry of Civil Aviation, for help. Officials at the Finance Ministry said that lenders, led by State Bank of India, are working on a revival package.
Jet Airways CEO Vinay Dube also wrote to SBI for an emergency funding of Rs 400 crore.
In a communication to employees later in the day, Dube said: "Subsequent to the meeting of the Jet Airways Board of Directors held earlier today, the Company’s leadership continued its engagement with the Indian lenders (led by State Bank of India). The Company, under the guidance of the Board has reached out to our lead lender, State Bank of India yet again and stressed on the need for urgent funding requirements, critical to the continuation of the operations of our airline."
"In the said communication, we have highlighted the specific areas that will be immediately impacted, should the funding not be forthcoming. It is our earnest endeavour to keep all lines of communication open with you, such that you continue to be updated on all critical developments," Dube said in the note.
He assured employees that Jet continues to work proactively with the Indian lenders to provide all the required support, to help resurrect the airline, including working closely with the potential parties that are keen on bidding for the airline.
A final decision will be taken once the company hears from the banks. Executives said an announcement could be made later in the evening.
Industry regulator DGCA has got more requests to de-register aircraft that were earlier part of Jet Airways fleet.
According to data from the regulator, de-register requests have come for 19 aircraft. Already, 28 aircraft have been de registered. Once de-registered from a country's regulator, a lessor can take the aircraft out of the country and lease it to another airline.
At the same time, such requests for seven aircraft have been withdrawn. The airline is flying seven aircraft at the moment. It originally had 119.
Jet Airways also stands the risk of losing its aircraft, if US Exim Bank withdraws the guarantees it gave to banks to provide loans to the airline.
According to executives in the industry, the Bank is expected to withdraw the guarantees, and Jet Airways may risk losing 10 of its aircraft.
"Once they (US Exim Bank) are no longer guaranteeing the loans, the banks have no interest in providing the funding, as it becomes too much of a risk (plus Jet is already in default)," said Nitin Sarin, Managing Partner of Sarin & Co, which specialises in aviation law.
"So naturally, they will try and repossess the aircraft," he added.
A possible shutdown of Jet Airways could also boil over as an election issue.
The second phase of polling is scheduled for April 18, and that is when Maharashtra also votes. Jet Airways is headquartered in Mumbai, and has a total employee strength of nearly 20,000.
The Centre is also battling Opposition charge on lack of job opportunities in the country.Note: The story has been updated to incorporate latest developments.