ZCZC
BCN-24
INDIA-ECONOMY-AVIATION-JET
India’s Jet grounds four planes after failing to pay lessors
MUMBAI, Feb 8, 2019 (BSS/AFP) – India’s Jet Airways has grounded four
planes after failing to pay lessors, the airline said, in the latest evidence
of financial distress at the debt-laden carrier.
The airline — India’s second-largest by market share — is buckling under
the weight of debts worth $1.1 billion and is urgently seeking funds to
continue flying.
The Mumbai-based carrier has been badly hit by fluctuating global crude
prices, a weak rupee and fierce competition from budget rivals which has
sparked price wars.
Millions of dollars have been wiped off its market capitalisation over the
past year.
“Four aircraft have been grounded due to non-payment of amounts
outstanding to lessors under lease agreements,” the carrier said in a
statement to the Bombay Stock Exchange late Thursday.
“The company is actively engaged with all its aircraft lessors and
regularly provides them with updates on efforts undertaken by the company to
improve its liquidity,” it added.
Jet Airways first hit turbulence in August when it failed to report its
quarterly earnings or pay its staff, including pilots, on time.
Chief executive Vinay Dube later reported a loss of $178 million for July-
September and announced a cost-cutting programme amounting to 20 billion
rupees ($280 million) over the next two years.
In January the airline admitted it had failed to meet debt payments to
banks as it seeks investment to help turn around its fortunes.
Jet has been in talks with Etihad Airways over an injection of cash that
would see the Abu-Dhabi-based airline increase its stake.
Jet is also in negotiations with India’s biggest lender, the State Bank of
India, about turning debt into equity.
India’s passenger numbers have grown six-fold over the past decade and the
country’s aviation sector is projected to become the world’s third-largest by
2025.
But airlines — including India’s largest by market share, IndiGo — and
loss-making national carrier Air India are struggling to turn demand into
profit.
BSS/AFP/HR/1110