A day after Jet AirwaysNSE -31.46 % suspended all its flights after running out of money, lenders to the carrier Thursday said they were “reasonably hopeful” that bidding process for the airline will end successfully.
Lenders led by the State Bank of India NSE -1.57 % had declined to extend more funds to Jet, forcing it to suspend all its flights.
“The lenders after due deliberations decided that the best way forward for the survival of Jet Airways is to get the binding bids from potential investors who have expressed EOI (Expression of Interest) and have been issued bid documents on April 16,” a statement by lenders said.
A consortium of 26 lenders led by the SBI, with 51 per cent stake in the debt-trapped airline, has invited bids from potential suitors.
“Lenders are reasonably hopeful that the bid process is likely to be successful in determining the fair value of the enterprise in a transparent manner,” it said.
Banks on Wednesday rejected an immediate Rs 400 crore demand of Jet Airways, compelling it to ground operations.
Jet had been, over the last few months, on a decline as competition from budget airlines hurt its profitability and led to a debt pile. It reported losses for four straight quarters despite sales holding up.
At its peak, Jet operated 123 planes and over 600 daily flights. It was flying just seven planes on Tuesday.
Its chief executive officer Vinay Dube on Wednesday wrote an email to airlines’ passengers saying “with deep sadness and with a heavy heart that we would like to share with you that, effective immediately, Jet Airways will be suspending all its domestic and international operations”.
“Tuesday 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,” he wrote.
He said the airline had over the last several weeks and months tried “every means possible” to seek funding, both interim as well as long term funding, to keep our operations going. “Unfortunately, despite the very best of our efforts, we have been left with no other choice today”.
“A decision like this is never easy to make, but without the interim funding, which we have been repeatedly requesting for, we are simply unable to conduct flight operations in a manner that delivers to the very reasonable expectations of our guests, employees, partners and service providers,” he wrote.
“After 25 years of sharing the Joy of Flying with Indian and international guests, Jet Airways and its Board of Directors have been forced to take this extreme measure, as prolonged and sustained efforts with lenders and authorities to ensure the sustainability of the airline did not yield the desired results.”
He, however, said the future provides new hope and opportunity as India is better off with a flying Jet Airways.
“We will now await the bid finalization process by SBI and the consortium of Indian lenders and will continue to support the bid process initiated by the lenders,” he added.
Passengers who had booked on Jet for travel on future dates will get a refund. “We sincerely and profusely apologise for the disruption to your travel plans. We would like to thank you for your continued patronage, support and loyalty over the years. We are hopeful that we will be able to bring the Joy of Flying back to you soon,” he added.
Source: Economic Times