The lenders, led by SBI, were originally expected to transfer Rs 1,500 crore, which was later brought pared to Rs 1,000 crore. But now, even Rs 400 crore is out of the question as not all banks are ready to part with any more money for a carrier that owes them more than Rs 8,000 crore.
Jet Airways will temporarily halt operations from April 17 onward after banks rejected the debt-laden carrier's request for emergency funding. Now all hopes, especially of its over 20,000 employees, rest on the bidding process that is expected to end by May 10, with a new owner.
Its last flight will land in Mumbai at 10.30 pm on Wednesday. Its first flight, 26 years ago on May 5, 1993, had taken off from Mumbai.
The final decision came after its lenders, responding to a desperate plea from CEO Vinay Dube on Tuesday to release Rs 400 crore in interim funding, refused to consider the request.
Dube had written to the lenders, after direction from the Board, which had met on Tuesday morning. It was a last ditch effort, as the interim funding of Rs 983 crore that the airline was seeking and hoping to get on April 15, didn't materialise. The lenders didn't want to lend more to an airline that already owes them about Rs 9,000 crore.
"Since no emergency funding from the lenders or any other source is forthcoming, the airline will not be able to pay for fuel or other critical services to keep the operations going. Consequently, with immediate effect, Jet Airways is compelled to cancel all its international and domestic flights. The last flight will operate today," stated the release.
The release also stated that the airline has informed the DGCA, and the Ministries of Civil Aviation and Finance and other relevant government institutions.The Ministry of Civil Aviation has also confirmed the same in a tweet,
Jet Airways has informed MoCA that it is temporarily ceasing operations. The bank-led resolution process is still underway and expected to end by May 10. During this time, MoCA will support the resolution process within the existing legal and regulatory framework. (1/5)
— Ministry of Civil Aviation (@MoCA_GoI) April 17, 2019
"Jet Airways has informed MoCA that it is temporarily ceasing operations. The bank-led resolution process is still underway and expected to end by May 10. During this time, MoCA will support the resolution process within the existing legal and regulatory framework," said the tweet.
The Ministry has also noted that any passenger complaints or issues should be reported to the Air Sewa portal or mobile app.
"Secretary MOCA will be convening a meeting with airports(first half ) and airlines (second half) tomorrow to coordinate and address any emerging issues on capacity, slots and passenger convenience," it said.
Just after the announcement, Dube wrote to Jet Airways employees saying that the management tried "all possible means" to get the funding... but we were not successful."
The airline was flying five aircraft on Wednesday - of its original fleet of 119 aircraft. According to data from the regulator, de-register requests have come for 19 of Jet Airways 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.
This will make the resumption of operations a tougher task. "Few airlines have managed to resume operations after suspending operations. SpiceJet had managed to because its operations were shut for just few hours," said a senior executive from the industry.
The temporary close raises question of over the future of 16,500 employees of Jet Airways. The airline also employs about 6,000 more indirectly. The All India Jet Airways officers and Staff Association plans to meet the airline management on Thursday morning, and may later address the media.
While its pilots, engineers and senior management hadn't been paid since January, the airline had also deferred March salary of all its employees.
Dube acknowledged, in the communication to employees just after the closure statement, that the management at present doesn't have an answer to the question - 'what happens to us employees during the sale process'.
"Your leadership is working on answering such questions alongside the lenders... as and when we have further clarity on this topic, we will communicate with you," said Dube.
All hopes of reviving the airline now rests on the bidding process that is being overseen by SBI Caps.
Four bidders - Etihad Airways, TPG Capital, Indigo Partners and NIIF - have been shortlisted. Founder and former Chairman Naresh Goyal had opted out of the race, after initially put in an expression of interest.
In a communication to Jet Airways, the lenders said:
“The Expressions of Interest (EOI) have been received and bid documents have been issued to the eligible recipients today. The bid documents inter alia has solicited plans for a quick revival of the company. The bid process will conclude on 10thMay 2019 … We are actively working to try and ensure that the bid process leads to a viable solution for the company.”
Note: This copy has been updated for the latest developments.