Jet Airways, once India’s largest airline, announced today that it is suspending all operations after failing to raise enough money to run its services. The company said it has been informed by its lenders, led by state-run State Bank of India, that they are unable to consider its request for funding to keep flying.
Indian airline Jet Airways will suspend all flight operations from 2230 April 17. All Jet Airways flights after 2230 have been canceled. While the airline has said that the suspension of operations is temporary, the airline does not have a clear plan to resume operations.
Jet Airways has asked customers seeking refunds to contact travel agents, visit one of the airline’s sales offices, or fill out a form on the airline’s website.
Jet Airways’ low-cost carrier subsidiary JetLite (S2) will also suspend operations.
Jet Airways has been forced to suspend operations because the consortium of banks that controls the airline has refused the management team’s request for an infusion of funds that the airline needed to continue operations. The banks intend to sell the carrier to an outside investor, and efforts to do so are ongoing. The sale process is scheduled to conclude May 10; Jet Airways is highly unlikely to resume operations before that date.
Jet Airways had already significantly reduced operations due to ongoing financial difficulties that the airline first revealed in August 2018. Over the past three months, the carrier was forced to ground most of its aircraft and cancel most flights as it lacked the funds to pay the aircrafts’ leasing fees.
The airline had 119 planes on Dec. 31, when it first defaulted on some of its more than $1 billion in debt. This week, it reduced its operations to only seven aircraft flying domestic routes.
The airline reported a net loss in the quarter that ended in December of 5.8 billion rupees, about $83 million. Jet Airways pilots complained that they had not received a salary in four months.
The New Delhi Television news channel said 20,000 jobs at the airline were at stake.
It is unclear if Jet Airways will be able to resume operations. The only realistic scenario for a resumption of services is if an outside investor buys the airline from the consortium of banks. The banks are seeking offers from investors and intend to sell the carrier by the May 10 deadline, but there are currently no public indications that the banks have found an investor dedicated to resuming Jet Airways’ operations.
If traveling on Jet Airways, book flights on alternative carriers as soon as possible. Allow extra time for transit through airports. If traveling on a Jet Airways codeshare flight operated by another carrier, confirm the flight with the operating carrier.
This is the second carrier to go bust in the past month, and yet another reminder of why you should always use a credit card to book your air travel, as opposed to a debit card, ESPECIALLY when booking with a smaller carrier. When you use a credit card you can always depend on getting a refund, something which isn’t necessarily the case when you use a debit card.