Crisis talks between India’s cash-strapped Jet Airways Ltd and aircraft lessors have failed to ease a row over late payments, prompting some lessors to explore taking back aircraft, three people familiar with the matter told Reuters. In what one of the people described as an ill-tempered showdown between the airline and some of the world’s leading leasing firms, Jet’s main lender State Bank of India sought to provide reassurance that India’s biggest full-service carrier is doing all it can to pay its staff, suppliers and creditors. “Jet has been delinquent for many months.
Nobody wants to get in a situation where the problems worsen and it becomes even more difficult to take out aircraft,” one of the people said. Jet controls over a sixth of a market experiencing an unprecedented boom in air travel. Yet high fuel taxes, a weak rupee and price competition have squeezed profitability, leaving Jet with 80.52 billion rupees (893.63 million pounds) in net debt as at the end of September and defaulting on payments.
The airline had previously told some lessors it would clear arrears by Dec. 31, but was unable do so, the people close to the matter said. At meetings on Tuesday, held at SBI’s headquarters in Mumbai’s business district, the bank’s Chairman Rajnish Kumar was asked how Jet planned to raise equity or debt, said one of the people - an attendee, who found the responses lacked sufficient detail.