India's Jet Airways collapses as banks pull the plug

OCP

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#1
https://edition.cnn.com/2019/04/17/business/jet-airways-collapse-india/index.html

The once-mighty Indian carrier said in a statement Wednesday that it was suspending all flights after failing to secure emergency funding from the country's banks.
The airline has been struggling for months to stay in business and the announcement follows weeks of speculation over its fate.
"This has been a very difficult decision but without interim funding, the airline is simply unable to conduct flight operations," Jet Airways said in statement.
The carrier's collapse is the biggest in India since the failure of fugitive billionaire Vijay Mallya'sKingfisher Airlines in 2012.
It's a huge blow to India's aviation industry as it struggles to meet soaring demand while keeping costs low.
It also comes at an inopportune time for Indian Prime Minister Narendra Modi. He is seeking a second term in a national election due to conclude on May 23.
Opposition parties have criticized his government for failing to bring down unemployment among India's millions of young people.
Jet Airways said it was informed late Tuesday by a consortium of lenders, led by the government-run State Bank of India, that they would not be able to provide more cash.
The company described the suspension of flights operations as temporary, but the absence of funding puts more than 20,000 jobs at risk.
"Above all, the airline would like to express its sincere gratitude to all its employees and stakeholders that have stood by the company in these trying times," it said in its statement.
Passengers would be informed about the closure via email and text messages, and would be able to claim a refund, it added.
The airline's operations had already shrunk to 40 flights on five aircraft by Tuesday, according to local media.

The carrier was founded in the early 1990s by Naresh Goyal and went on to dominate India's airline industry, accounting for nearly 20% of passengers carried by Indian airlines in 2018.
Yet in recent years it struggled to cut costs to compete with newer budget airlines like IndiGo. Rising oil prices and the increased volatility of India's currency, the rupee, only made matters worse.
Goyal stepped down in late March as part of a planned $218 million bailout that handed control to the banks. But that bailout did not materialize, with Jet Airways saying Wednesday the banks were "unable to consider its request" for funds to keep it flying.
The banks will continue their search for a private investor to buy 75% of the airline. The deadline for bids is May 10.
"We are actively working to try and ensure that the bid process leads to a viable solution for the company," the consortium said in a statement shared by Jet Airways.
Etihad Airways, which acquired a 24% stake in Jet in 2013, has been touted as a possible buyer, but Abu Dhabi's national carrier has problems of its own after losing about $4.9 billion in three years.
Etihad said it would support passengers affected by the suspension of flights.
"We continue to work with Jet management, lenders and key stakeholders in the context of the lender-managed effort to restructure the company," an Etihad spokesperson added.
Jet isn't the only Indian airline in dire straits — the country's national carrier, Air India, is surviving on billions of dollars of taxpayer money after a failed attempt to privatize it last year.
 

mattrudlles

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#3
https://edition.cnn.com/2019/04/17/business/jet-airways-collapse-india/index.html

The once-mighty Indian carrier said in a statement Wednesday that it was suspending all flights after failing to secure emergency funding from the country's banks.
The airline has been struggling for months to stay in business and the announcement follows weeks of speculation over its fate.
"This has been a very difficult decision but without interim funding, the airline is simply unable to conduct flight operations," Jet Airways said in statement.
The carrier's collapse is the biggest in India since the failure of fugitive billionaire Vijay Mallya'sKingfisher Airlines in 2012.
It's a huge blow to India's aviation industry as it struggles to meet soaring demand while keeping costs low.
It also comes at an inopportune time for Indian Prime Minister Narendra Modi. He is seeking a second term in a national election due to conclude on May 23.
Opposition parties have criticized his government for failing to bring down unemployment among India's millions of young people.
Jet Airways said it was informed late Tuesday by a consortium of lenders, led by the government-run State Bank of India, that they would not be able to provide more cash.
The company described the suspension of flights operations as temporary, but the absence of funding puts more than 20,000 jobs at risk.
"Above all, the airline would like to express its sincere gratitude to all its employees and stakeholders that have stood by the company in these trying times," it said in its statement.
Passengers would be informed about the closure via email and text messages, and would be able to claim a refund, it added.
The airline's operations had already shrunk to 40 flights on five aircraft by Tuesday, according to local media.

The carrier was founded in the early 1990s by Naresh Goyal and went on to dominate India's airline industry, accounting for nearly 20% of passengers carried by Indian airlines in 2018.
Yet in recent years it struggled to cut costs to compete with newer budget airlines like IndiGo. Rising oil prices and the increased volatility of India's currency, the rupee, only made matters worse.
Goyal stepped down in late March as part of a planned $218 million bailout that handed control to the banks. But that bailout did not materialize, with Jet Airways saying Wednesday the banks were "unable to consider its request" for funds to keep it flying.
The banks will continue their search for a private investor to buy 75% of the airline. The deadline for bids is May 10.
"We are actively working to try and ensure that the bid process leads to a viable solution for the company," the consortium said in a statement shared by Jet Airways.
Etihad Airways, which acquired a 24% stake in Jet in 2013, has been touted as a possible buyer, but Abu Dhabi's national carrier has problems of its own after losing about $4.9 billion in three years.
Etihad said it would support passengers affected by the suspension of flights.
"We continue to work with Jet management, lenders and key stakeholders in the context of the lender-managed effort to restructure the company," an Etihad spokesperson added.
Jet isn't the only Indian airline in dire straits — the country's national carrier, Air India, is surviving on billions of dollars of taxpayer money after a failed attempt to privatize it last year.
Damn they had cheap flights IIRC.
 

eg2505

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#4
sure the MAX grounding didnt help things along.

wonder how our local comair handling it, if they might just go under the same way.
 

eg2505

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#8
The MAX grounding had fsck all to do with this.... Jet Airway had a sum total of 5 MAX's in a fleet over over 100 planes.
still paying for grounded planes cant be easy,
I mean its like paying car payments, for a car you not allowed to drive.

that couldn't have helped their financial situation. especially a low cost carrier.
that profit margins are so slim to nothing almost.
 

ToxicBunny

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#9
still paying for grounded planes cant be easy,
I mean its like paying car payments, for a car you not allowed to drive.

that couldn't have helped their financial situation. especially a low cost carrier.
that profit margins are so slim to nothing almost.
They were screwed regardless of the MAX issues. period. No ifs ands or buts like you are creating in your head.
 

eg2505

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#10
They were screwed regardless of the MAX issues. period. No ifs ands or buts like you are creating in your head.
airlines fail all the time, granted.
but having a bunch of planes in your fleet, that one cant fly due to technical reasons, wont help anybody.

more so if your financially stressed as it is, and expecting the MAX to bring in more income.
and then your forced to ground them, and here they sit on the ground gathering dust.

you cant say that didn't help their situation, as it sure didn't.
maybe if they never spent that money and brought/leased older jets, they might have survived?
 

mercury12

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#11
Jet Airways (in conjungtion with the Giguptas) were involved in the Joburg-Mumbai SAA flight being stopped, which was one of the more profitable routes. They took over that leg for a short while.

+1000
I used Jet Airways once upon a time between Mumbai / Delhi and Mumbai / Goa.
What happened to Kingfisher airlines? *edit* I see it was closed in 2012.
https://en.wikipedia.org/wiki/Kingfisher_Airlines
The Kingfisher owner (Vijay Mallya) is about to be extradited for corruption charges. The Kingfisher beer is still around, its one of my favourite beers.
 

ToxicBunny

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#12
airlines fail all the time, granted.
but having a bunch of planes in your fleet, that one cant fly due to technical reasons, wont help anybody.

more so if your financially stressed as it is, and expecting the MAX to bring in more income.
and then your forced to ground them, and here they sit on the ground gathering dust.

you cant say that didn't help their situation, as it sure didn't.
maybe if they never spent that money and brought/leased older jets, they might have survived?
They were fscked BEFORE the MAX's were grounded... its not complicated dude...
 

Ockie

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#14
sure the MAX grounding didnt help things along.

wonder how our local comair handling it, if they might just go under the same way.
Comair only has one in its fleet. It is a big deal to have a expensive machine like that sitting idle on the ground and not in the air earning money, but it wont bring Comair down.
 

eg2505

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#16
Comair only has one in its fleet. It is a big deal to have a expensive machine like that sitting idle on the ground and not in the air earning money, but it wont bring Comair down.
Comair had 2, one wasn't delivered if I remember? so does Comair still pay the lease payments on it?
so if your a struggling airline, in financial trouble before the MAX as bad as that is, you now have an added burden of another 5 MAX aircraft grounded.

Im pretty sure you going to go bankrupt faster, then if you never had MAX aircraft and spent the money on older aircraft that stayed functional,
thats my point toxic. it was compounded by having the MAX in the first place.

its not complicated, bad but still afloat with older aircraft, vs bad lets make it worse by adding aircraft that stay on the ground permenently.
that we still pay a pretty penny for and may never get our refund for.
 

ToxicBunny

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#17
FFS, it wasn't... they were screwed before the MAX's were grounded.... they were going under, period. At best the MAX's made that happen a week earlier than it would have otherwise (and that is a monumental stretch)

Nope, doing some more reading, the MAX played ZERO role in their collapse... none what so fscking ever. It didn't make it happen any faster or slower than it was going to happen.
 

ForceFate

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#18
FFS, it wasn't... they were screwed before the MAX's were grounded.... they were going under, period. At best the MAX's made that happen a week earlier than it would have otherwise (and that is a monumental stretch)
:D
You're going to give yourself a heart attack because of eg2505
 

ForceFate

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#20
Comair had 2, one wasn't delivered if I remember? so does Comair still pay the lease payments on it?
so if your a struggling airline, in financial trouble before the MAX as bad as that is, you now have an added burden of another 5 MAX aircraft grounded.

Im pretty sure you going to go bankrupt faster, then if you never had MAX aircraft and spent the money on older aircraft that stayed functional,
thats my point toxic. it was compounded by having the MAX in the first place.

its not complicated, bad but still afloat with older aircraft, vs bad lets make it worse by adding aircraft that stay on the ground permenently.
that we still pay a pretty penny for and may never get our refund for.
?
 
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