Second largest Indian airline, Jet Airways has grounded all of its aircraft services. The airline has finally shut down after providing 25 years of aviation services.
Unfortunately, the company has run out of cash and had a pull back all of its aircraft back into the hanger. Although, everyone is calling it a temporary shut down. But around 20,000 employees are going to lose their jobs from tomorrow.
What exactly happened?
Yesterday, on April 17, Board head of Jet Airways took a very sad decision of temporarily grounding all of its aircraft and other aviation services. Officials announced that the company has run out-of-cash, they are unable to take care of daily expenses, such as fuel cost and other running expenses.
Wednesday night, Jet Airways Flight 9W2502 was pushed back from service at the Amritsar airport. Boeing 737-800 was the last flight that took off for Mumbai. We are not really sure if this shut down is ever going to end.
The company has been looking for funds. It had already asked a group of lenders for an emergency funding of 400 crores. But, it doesn’t seem like anyone is ready to help the airline. Just like Kingfisher, Jet Airways is also going to stop its aviation services.
Lenders, who own a majority of stakes in the airline, have already refused to help. As they are focussing on a bidding process that can help them to find a new investor. Stakeholders are trying to find someone who can fresh invest in the airline to make it up and flying again.
Why did lenders refuse to invest?
The airline has been facing pullbacks since last year. To make up for all the losses, the airline had to take loans from different lenders. At this point of time airline owes around Rs 8,500 crore. It has not paid rent for the planes it leased. Company has also got one of their planes seized in Amsterdam as they were unable to pay the lease rent.
This along with the international crude prices has made the company to ground all of its aircraft. In the end, Jet Airways left with 5 aircraft. This shut down has caused 20,000 employees to lose their earning. The company has stopped all of its services without any prior notice and it comes to all its employees as a shock.