Indian airline Jet Airways suspended all of its domestic and international flights as it ran out of money after a refusal by its lenders, including the State Bank of India, to refinance its debt on Wednesday.
The suspension, that was described as temporary, followed moves to trim the airline’s fleet and the loss of some rented planes which were taken away due to lack of payment.
"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,” the company said in a statement. “Consequently, with immediate effect, Jet Airways is compelled to cancel all its international and domestic flights.”
Jet Airways, one of the largest and oldest airlines in India, has faced its biggest crisis in recent months due to a lack of liquidity and increasing debts to its suppliers.
Almost a month ago the airline decided to oust its president and founder, Naresh Goyal, as a member of the board of directors as part of a rescue plan adopted by the company and imposed by a consortium of lenders, led by the State Bank of India, in a bid to restructure its debts.
In addition, the airline was waiting for immediate help of just over $200 million to restore normal operations which had been strangled by toxic assets.
“Over the last several weeks and months, the company has tried every means possible to seek both interim and long-term funding,” the statement said.
“Unfortunately, despite its very best efforts, the airline has been left with no other choice today but to go ahead with a temporary suspension of flight operations.”
The State Bank of India informed the airline it could not consider a request for financing.
Around 100 pilots, crew members and engineers staged a protest on Tuesday in which they announced the start of a strike until they were paid the wages owed for at least three months.
The development also leaves a hole in Boeing's order book as Jet Airways had obtained 125 of the now grounded 737 MAX single-aisle planes, of which none had been delivered, with 10 Dreamliners ordered in 2006 also awaiting handover.
With more than 100 national and international destinations, Jet Airways, founded in 1993, operated more than 100 aircraft on about 500 daily flights, according to data from the airline. EFE-EPA