Mumbai: Jet Airways (India) Ltd has received notices from some aircraft leasing companies for delays and defaults on rental payments, the airline said. This has compounded woes for the cash-starved airline. India’s second-largest domestic carrier by market share, however, has no dues outstanding with state-run Airports Authority of India (AAI), which runs most of the airports in the country, the Mumbai-based carrier informed the stock exchanges on Wednesday.
Jet Airways gets notice over aircraft lease defaults
Shares of the Naresh Goyal-controlled carrier plunged more than 11% on the news. They recovered partly to close 5.7% lower at ₹222.3 on the BSE, widely underperforming a 1.63% rise in the benchmark Sensex to 34,442.05. The stock has lost nearly 62% in the past year.
Jet Airways, which had a 14.2% of share of the domestic market in September, is in a race to raise funds as high jet fuel prices and a weak rupee have harmed its financial health. The airline posted a standalone loss of ₹1,323 crore in the June quarter.
“Whilst the company is in the receipt of notices for payment delays/defaults from few aircraft lessors, they are mindful of challenges currently faced by the Indian aviation industry and they have been supportive of the company’s efforts,” Jet Airways said in its statement to the BSE.
“We also wish to clarify that the company is current on its payments to Airports Authority of India and no show cause notice has been received by the company from AAI,” it said.
Business Standard reported on Monday that Jet Airways has defaulted on payments to aircraft lessors and has also been served a show cause notice by AAI for payment delays. The airline, in its reply to the exchanges, said it is engaged with the lessors and is informing them regularly of efforts to improve liquidity.
Jet Airways, which also seeks to improve operational efficiencies, has appointed Goldman Sachs Group and Boston Consulting Group as advisers for these goals.
The carrier has drafted a turnaround plan, which includes a cost reduction programme of more than ₹2,000 crore over two years, a plan to improve pricing and inventory, and the sale of a stake in its loyalty programme, Jet Privilege Pvt Ltd.