Earlier this week the future for Jet Airways appeared dire. In the intervening days the situation worsened. With only a handful of aircraft flying this weekend, and only on domestic routes, it seems the end is finally nigh. For travelers holding tickets it is (way past) time to seek alternate arrangements.
Following the impounding of a 777-300ER in Amsterdam on Wednesday the carrier trimmed its international route portfolio dramatically. Only one European flight operated on Thursday. Similarly, only one operated on Friday. None are expected over the weekend as the carrier will operate only a handful of aircraft on domestic routes.
Earlier Friday afternoon Jet Airways permanently transferred its slots at Heathrow Airport to minority investor Etihad Airways. Had Jet Airways still been the owner of record when it halts operations those slots would have reverted to the airport slot authority for reassignment. The transfer gives Etihad a small return on its massive investments over the years.
Previously the carrier’s slots at India‘s major airports were “temporarily reassigned” to other domestic operators. The move aimed to ensure that travelers would continue to have flight options, though it also required those other carriers to alter their operations to account for the new opportunities. It remains to be seen how the temporary allocations will be handled should Jet finally succumb.
In addition to the fleet and route cuts the airline is now also being cut off from the rest of the global aviation markets. The Airlines Reporting Corporation (ARC) is responsible for processing payments for tickets across 13,000 points of sale in the United States. Late Friday afternoon ARC issued a statement indicating that it would no longer process transactions for Jet Airways, owing to its suspension of international routes and inability to “support the processing of cash refunds.” As a result, “ARC will inhibit the processing of Jet Airways sales transactions, cash refunds and memos in [Interactive Agent Reporting (IAR)].” The only silver lining at this stage is ARC will still process credit card refunds where viable against Jet Airways purchases.
The specific calling out of Jet’s inability to process cash refunds speaks to the liquidity crunch the carrier faces.
Read More: Further troubles for Jet Airways: Collapse appears likely
The theoretical rescue funds from the State Bank of India (SBI) – up to $225 million – have failed to materialize since the announcement of that deal. SBI solicited bids from outside investors to supply the cash and take on a management role in the operation. The initial deadline for bids was Wednesday but that extended to Friday, supposedly owing to increased interest in the market. Reports now suggest that six Enquiries of Interest were received by The State Bank of India to act as an investor in the recovery process.
Founder Naresh Goyal is rumored to be part of one of the bids. Goyal’s unwillingness to cede control earlier in the restructuring process prevented the company from securing a restructuring plan for several months. If he is allowed to now buy back in to the airline at a discount, based on his actions significantly contributing to the failures, that would create an interesting situation for debtors.
Even if another suitor is selected it is hard to imagine bringing the carrier back from the brink of death as it stands today.
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Superb professional excellence in tracking all the administratives which makes airlines run.