Jet Airways grounds 4 more planes, Etihad aid may be conditional

Even as speculations are rife that Etihad Airways has set several conditions to extend a financial lifeline to save Jet Airways, the passenger carrier on Tuesday said that four more aircraft have been grounded over non-repayment of dues to lessors, taking the total to 32.

Till now the company, in BSE filings, has informed that its 19 aircraft were grounded in February over non-repayment of dues to lessors, while 13 aircraft were grounded this month, taking the total to 32. The Jet Airways Group operates a fleet of 123 aircraft. However, around 50 planes are said to be non-operational due to a host of reasons, including lack of spare parts. 

With regular grounding of aircraft, sources said close to 50 per cent of the airline`s fleet is not operational. Analysts said the situation is fast moving on the path taken by now-defunct Kingfisher Airline. "Further to our letter dated 7 March, 2019, we now write to inform you that an additional four aircraft have been grounded due to non-payment of amounts outstanding to lessors under their respective lease agreements," the airline said in a regulatory filing to the BSE on Tuesday.

"The company also continues to provide required and periodic updates to the Directorate General of Civil Aviation in this regard." The development assumes significance as the Gulf-based Etihad Airways, which holds 24 per cent stake in the Indian airline, and a new partner, are said to have set several conditions to extend a financial lifeline to save Jet Airways. 

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According to reports, Etihad Airways and a new partner will together invest around Rs 4,000 crore to revive the airline. The reports, based on a MoU apparently signed between Etihad and Jet, said that the company`s founder Naresh Goyal and his wife will step down from the airline`s board. 

On March 8, the cash-strapped Jet Airways` outgoing Chairman Goyal had sought an immediate funding of Rs 750 crore from Etihad. In a letter written to Etihad Aviation Group CEO Tony Douglas on March 8, he had sought the funding by early next week. 

"As you are no doubt aware, Jet Airways is in a very precarious position, with more than 50 aircraft grounded and increasing arrears of vendors and salaries, which makes the need for interim funding all the more imperative," the letter, accessed by IANS, said. 

"I now look forward to your support and cooperation in saving the airline by an urgent fund infusion by way of interim funding support of Rs 750 crore early next week, so that a matching contribution from the banks is also disbursed, as envisaged in the Resolution Plan," it said. 

To move things forward, Jet Airways has secured the approval from the Ministry of Civil Aviation for pledging of Jet Airways` shares in Jet Privilege Pvt Ltd (JPPL) to secure the interim funding, it noted. Jet Airways holds 49.9 per cent stake in JPPL, while the majority is with Etihad.  Etihad Airways` board even met in Abu Dhabi on Monday to discuss the resolution plan for Jet Airways. 

The Jet Airways board had on February 14 approved the resolution plan, as per which the lenders, led by the State Bank of India (SBI), would become the largest shareholders in the airline by converting itss debt into equity at a nominal price of Re 1. The bailout plan was approved by the shareholders on February 21.