Chennai: Cash-trapped carrier Jet Airways is not operating at full potential, grounding over 40 per cent of its total fleet due to various reasons including non-payment of rentals, reports state.
According to reports, an official from the Directorate General of Civil Aviation (DGCA), has revealed that out of 123 aircrafts that Jet owns, 70 (around 40 per cent) are not seeing the skies due to lack of spares and non-payment of lease rentals, among other things. The Jet currently has Airbus A330s and Boeing 737-800s, apart from other flights.
Giving an affirmative nod to the reports, Jet Airways said in an exchange filing that it was forced to ground three more aircraft on Thursday due to non-payment of lease rentals.
This has taken the total number of aircraft grounded on account of rental defaults to 28 including newly-introduced Boeing 737 Max. Other 25 aircraft are reportedly parked at different airports for want of service and spare as the full-service carrier faces its worst financial crisis, reports said.
According to DGCA sources, the airline has been compelled to cancel nearly 200 domestic flights every day, approximately a third of the daily schedule of 600 flights.
The reports came after a top official at the DGCA said Jet’s flight schedule is being monitored on a monthly basis as its fleet count has been reduced to 70.
Director General of DGCA, BS Bhullar, speaking to reporters, said, “Jet’s financial situation is well known. We are in constant touch with the airlines. We have told them to inform passengers about cancellations well in advance so that inconvenience is minimised.”
He added that forward sales would not be banned as it can create a panic in the industry.
Jet’s aircraft grounding tale started announcing that it will not fly four of its planes on 7 February for non-payment to lessors. The airline took another two aircrafts out of operations due to similar reasons on 23 February.
Four days later, Jet Airways grounded seven aircrafts while on the last day of the month, it grounded six aircrafts. All of them were due to the non-payment of lease rentals. Later, two aircrafts were grounded on the first day of the month. The same followed on 2 and 4 March.
Meanwhile, Jet founder Naresh Goyal may be willing to step down as the chairman of the airline’s board and the airline is negotiating with lessors to bail it out, the management revealed earlier.
Reports state that Jet’s equity partner Etihad Airways might be unwilling to infuse any funds in the interim in the cash-strapped carrier. The Abu Dhabi-based airline, which has a 24 per cent stake in Jet, is believed to have decided to infuse funds only after the bank-led resolution plan (BLRP) led by State Bank of India, is finalised and approved.
The airline is currently undergoing a BLRP which includes infusion of funds, restructuring of debt and monetisation of assets.
The BLRP has estimated a funding gap of around Rs 8,500 crore, including proposed repayment of aircraft debt of around Rs 1,700 crore, which will be met by an appropriate mix of equity infusion, debt restructuring, sale/sale and leaseback/refinancing of aircraft, etc.
Once approved, the lenders will become the largest stakeholders in the airline, while the stake of Goyal would come down from the current 51 per cent to the 20 per cent mark.
| Number Speak |
| Jet’s domestic passenger count was down nine per cent year-on-year during January while its market share fell to 11.9 per cent, according to the monthly passenger data. The number is the lowest in five years and is behind Air India, which was at 12.2 per cent. |