Jet Airways on Wednesday said that recent disruption in its operations was due to a scheduled termination of an aircraft lease and for carrying out an engine normalisation exercise. The airline said that the cancellation of a few of its flights is of a temporary nature and not related to the ongoing financial crisis.
“The cancellations were necessitated due to a scheduled termination of an aircraft lease and to carry out an engine normalisation exercise. The aircraft temporarily grounded for the engine normalization exercise are therefore expected to rejoin the scheduled operations on Friday i.e. February 1, 2019,” the company said in a statement.
“The company is actively engaged with all its aircraft lessors, and has been regularly providing updates on the efforts undertaken by the company to improve its liquidity. Aircraft lessors have been supportive of the company’s efforts in this direction and no Jet Airways aircraft have been grounded today due to an indefinite grounding demand by an aircraft lessor,” it added.
Media reports had said that the Irish-American commercial aviation financing and leasing company GE Capital Aviation Services (GECAS), had grounded six aircraft for non-payment of dues.
Denying the reports, Jet Airways said that passengers affected by the flight cancellations arising out of the temporary groundings, have been re-accommodated.
This comes even as the company had earlier said that it would find a solution to its ongoing debt crisis by the end of January. The airline has recently sought shareholders’ approval to convert debt into equity which would give the lenders a larger say in the running of the company.
“The airline’s key stakeholders are actively engaged towards finalisation of the Resolution Plan. Jet Airways is confident of successfully resolving the current challenging situation,” the airline said.
The airline owes money to its pilots, lessors, banks and vendors. Its problems have been exacerbated by higher oil prices and intense pricing competition in the domestic market. Jet Airways had also delayed the payment of an interest and principal instalment due on December 31 to its lenders.
The airline has loans of over ₹8,400 crore, with SBI being its biggest lender. SBI’s exposure is said to be close to ₹2,000 crore. In a bid to solve things between lessors, lenders and Jet Airways, SBI had in a meeting asked the airline to propose a restructuring plan. The key issue is whether Naresh Goyal continues as the promoter of the company or the lenders will take full control. Goyal had proposed to infuse ₹700 crore if he is allowed to remain as the promoter.