Crisis for Jet Airways deepens with fleet down to 11; PMO holds meeting, Naresh Goyal puts in bid

The crisis in debt-ridden Jet Airways deepened on Friday with its fleet coming down to 11 aircraft on Friday, leaving passengers stranded at various domestic and international airports. The government rules stipulate an airline must have at least 20 planes for operating international operations.

Soon after the carrier, facing the worst existential crisis in its over 25-year-old history, extended the suspension of its international operations till Monday, the Prime Minister's Office (PMO) held an urgent meeting to discuss the situation.

According to sources, the meeting was called after Civil Aviation Minister Suresh Prabhu asked secretary of the department Pradeep Singh Kharola to review issues concerning Jet Airways.

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After participating in the meeting at the PMO, Kharola held a meeting - through video conference - with the management of Jet Airways.

Passengers were left stranded at airports as Jet Airways announced on Friday that it is suspending international operations till Monday. Moreover, its employees carried out a protest march in Mumbai, asking the airline to pay their pending salaries.

Kharola told reporters that Jet Airways flew 11 aircraft on Friday and will fly six to seven aircraft on both days this weekend on domestic routes.

When asked if the airline has enough funds to keep the operations going on till Monday, the secretary replied in affirmative.

He said that Jet Airways had a meeting with the bankers on Friday "wherein they put forth their demand" regarding interim funding. A consortium of lenders - leading with State Bank of India (SBI) - is currently handling the airline.

Kharola said that the bankers have asked the airline to "rework its proposal" regarding interim funding.

"Monday again, they (Jet Airways) will be approaching the bank. Depending on what the banks decide, the future course of action would be taken," he said.

"Till Monday afternoon, (six to) seven planes would be flying. After that how many would fly would depend on their interaction with bankers," he added.

The secretary clarified that while one aircraft that would be flying in the weekend would be Boeing 737, all other aircraft would be ATR. With less than 100 seats, an ATR is a much smaller aircraft than Boeing 737.

Meanwhile, sources said that Jet Airways founder Naresh Goyal has put his bid for buying stake in the crisis-hit airline. It couldn't be immediately ascertained whether he has partnered with any entity or airline for the bid. Friday was the last date for initial bids set by SBI Capital Markets.

Other than Goyal, the UAE carrier Etihad Airways, Air Canada and the country's national investment fund among others are reported to have submitted bids, according to media reports.

SBI Caps has the mandate for Jet Airways' sale on behalf of the SBI-led consortium of the domestic lenders to the debt-ridden private carrier. The bidding norms allow Goyal to participate in the sale process.

Last month, Goyal and his wife Anita Goyal stepped down from the board of the airline, which has more than Rs 8,000 crore debt.

Naresh Goyal owns 50.1 percent in the airline, most of which is pledged with the consortium of lenders. Goyal had last month agreed to pare down his stake to 25.5 percent for an emergency fund of Rs 1,500 crore from the lenders, and leave the board but the process is yet to be completed due to procedural delays.

Airfares have been on an upswing across India for the last few weeks due to sharp decline in number of flights primarily caused by grounding of 90 per cent of the 119-aircraft fleet of Jet Airways.

The airline on Thursday had suspended its operations to the eastern and northeastern cities of India "till further notice".

(With inputs from agencies)