State Bank of India chairman says bankruptcy "last option" for Jet Airways

STATE BANK OF INDIA'S (SBI) head told reporters today (20) that putting Jet Airways into bankruptcy is the "last option" for lenders and that they are making every effort to keep the airline flying.

"We believe that it is in everybody's interest that Jet Airways continues to fly," the SBI chairman, Rajnish Kumar, told reporters after a meeting with government officials, adding that placing Jet into bankruptcy would mean grounding the airline.

Kumar said that talks with Abu Dhabi-based carrier Etihad, Jet's largest shareholder, to secure a rescue deal are ongoing.

There is also the possibility of bringing in a new investor, he said.

Kumar also added that any decision taken to rescue Jet is a commercial one and is not at the direction of the Indian government.

The 25-year-old airline has defaulted on loans after racking up over $1 billion (£755 million) in debt, and owes money to banks, suppliers, pilots and lessors - some of whom have started terminating their lease deals with the carrier.

The government has asked state-run banks to rescue Jet Airways without pushing it into bankruptcy, two people within the administration said.

Meanwhile, Jet Airways was seen fighting multiple crises today (20) after grounding six planes, leaving it with only a third of its fleet flying, while pilots have threatened to walk out and a major shareholder is reportedly looking to offload its huge stake.

The problems at India's number-two carrier come as other airlines struggle to turn a profit despite the sector rapidly expanding in the country over recent years.

Jet, which employs more than 20,000 people,has now been forced to ground a total of 78 of its 119 aircraft after failing to pay lenders and aircraft lessors.

In a statement late Tuesday (19) announcing its latest grounding, the firm it said it was "actively engaging" with lenders to secure fresh liquidity and wanted to "minimise disruption".

But with hundreds of customers left stranded, Jet's social media accounts have been flooded with often suddenly stranded passengers demanding information, new flight tickets and refunds.

"@jetairways We book our flights in advance so that we save on travel cost and you are sending cancellation (message) now?", read one irate tweet on Wednesday (20).

"I have sent a DM (direct message) regarding my ticket details. Please respond!", said Sachin Deshpande, according to his Twitter profile a design engineer.

The firm is also facing pressure from its many pilots who have not been paid on time, with unions threatening they will walk off the job if salaries do not arrive soon.

"Pilots will stop flying jet planes from April 1, 2019 if the company does not disburse due salaries and take concrete decisions," a spokesperson for the National Aviator's Guild, a pilots union, said.

"Jet Airways is rapidly reaching a point of no return and running out of assets to keep itself afloat," Devesh Agarwal, editor of the Bangalore Aviation website said.

"The only solution is equity expansion by diluting its stakes but Jet is just trying to cut losses and running out of options," Agarwal added.

(Reuters/AFP)