After struggling to get loans from the State Bank of India (SBI) for quite a while now, cash strapped Jet Airways temporarily shut down on the 18th of April.
In an extremely complex deal, the State Bank of India had agreed to bail out Jet Airways. By asking multiple banks to become major stakeholders of the airlines, SBI agreed to dole out a fresh investment of $ 271 million and at the same time, look for a new lender. Despite multiple pleas, the deal never materialized and finally, the SBI sent Jet a notice, saying they weren’t able to deliver the promised funds.
While announcing the temporary shutdown of the airline, Jet Airways said in a statement, “Late last night we were informed by SBI, on behalf of the consortium of Indian lenders, that they are unable to consider our request for interim funding. Since no emergency funding from the lenders or any other source of funding was forthcoming, it would therefore not have been possible for us to pay for fuel or other critical services to keep the operations going. With deep sadness and a heavy heart we would like to share that, effective immediately, we will be suspending all our domestic and international flight operations.”
The airline announced the shutdown after its last flight, a Boeing 373 flying from Amritsar, touched down in Mumbai, early morning on the 18th of April. Chief Executive Vinay Dubey took the call on the 17th of April after his last attempt to secure Rs. 400 crores for the airline was also denied.
This announcement left over 20,000 people without a job. Apart from this, banks also stand the chance of losing public funds worth Rs. 8,500 crores which were lent to the airline over a period of time. “With deep sadness and a heavy heart we would like to share that, effective immediately, we will be suspending all our domestic and international flight operations,” said Dubey, in an email addressed to the employees. Dubey also said, despite the Company being shut down for the time being, the board isn’t going to stop looking for new funding.
After running as the second largest airline in the Country for 26 years in a row, this shutdown of Jet Airways comes as a major disappointment to its loyal fliers.
With desperate board members seeking for some form of a lifeboat, there is still some hope of Jet Airways coming back stronger than ever.
Stay tuned for more updates.