India no longer shining for Jet Airways

ISLAMABAD: Buried under a billion dollars debt, Indian carrier Jet Airways has decided to ground a further six aircraft sending shockwaves to creditors, possible buyers and supporters of the company.

As the financial crisis deepens, the struggling company has delayed payments to banks, employees, suppliers and even aircraft lessors. Warnings are in place from pilots that they would stop flying for the carrier if their salaries were not paid by the end of current month.

In an official letter, company secretary Kuldeep Sharma said: "An additional six aircraft have been grounded due to non-payment of amounts outstanding to lessors under their respective lease agreements."

The airline has more than 100 aircraft in its fleet, and flies on 600 domestic and 380 international routes. But at least 50 of those aircraft have been grounded. Industry insider blames Naresh Goyal, the founder of the airline to be the reason for the crisis.

Etihad, which owns a 24 per cent stake in Jet Airways, had agreed to pump in more money and take control of the airline if Goyal step down as Jet Airways chairman. He is not ready to budge. A few months ago, India’s Tata group also showed interest in buying the airline, but then stepped back when Goyal refused to resign from the board. Reports now suggest that Etihad wants to sell off its entire stake in the airline and exit the business.

Jet Airways was India’s largest carrier in the 2000s, but it started to lose market share after the entry of low-cost airlines, which were able to optimise costs and make money in this hotly contested aviation market. There are reports the Indian government has asked state-run banks to step in and save Jet Airways. The Indian government wants to avoid job losses ahead of a general election.