Once India's biggest private air carrier, Jet Airways, which grounded operations on Wednesday, can now only depend on investors to give it a new lease of life as it struggles on a ventilator.
Naresh Goyal, the chairman of the debt-laden airline, has resigned and lenders have rejected requests for emergency funding to keep it afloat. The domestic carrier is burdened with more than Rs 8,000 crore of debt.
With 23,000 jobs at stake, will India witness the collapse of another carrier on the lines of Vijay Mallya-owned Kingfisher Airlines, which bit the dust in 2012?
On Thursday, lenders to Jet Airways, led by the State Bank of India, said that the way forward for the airline is to get binding bids from potential investors who submitted their expressions of interest and had received bid documents on 16 April.
Media reports have previously said that the four shortlisted investors include private equity firms TPG Capital and Indigo Partners, Indian sovereign wealth fund National Investment and Infrastructure Fund (NIIF) and the UAE's Etihad Airways, which already owns a minority stake in Jet.
The statement from the lenders came a day after the cash-strapped airline suspended all its flight operations indefinitely on Wednesday.
Earlier this month, lenders led by SBI were looking to sell 75% stake in the carrier and had invited expressions of interest. The lenders had even extended the deadline for accepting bids.
After taking control of the airline last month as part of a consensus deal, the SBI-led consortium of lenders had agreed to sanction fresh loans of Rs 1,500 crore but subsequently decided not to do so.
High oil prices, taxes and competition from low-cost carriers such as IndiGo and SpiceJet caused the financially struggling airline to disintegrate. The airline has made losses in nine of the past 11 years. In its heyday, it operated almost 120 planes and about 600 flights a day.
Jet shares were down almost 66 points or 28% on Thursday and were trading at Rs 175.30 apiece on the Bombay Stock Exchange in late morning trade.
Jet Airways joins national carrier Air India and Mallya’s Kingfisher Airlines which have built huge debt piles and have struggled to stay afloat.
Last year, national carrier Air India grabbed headlines last year when the government had sought to hive off 76% of the airline, amounting to about $5.1 billion of debt.
Lack of interest from bidders forced the government to shelve its plan to sell a majority stake in the beleaguered airline. It subsequently sought approval from parliament to inject $142.87 million in the carrier as part of a turnaround plan.
Kingfisher Airlines went under in 2012 and owed about $2.5 billion to banks, airports and others at that time. The airline in 2013 wanted to revive its operations but the difficulty in paying back its lenders put those plans on the backburner.