Jet Airways suspends all flights as lenders reject Rs 400-cr funding

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India's embattled Jet Airways Ltd is set to temporarily halt operations from Wednesday onward after its lenders rejected the airline's plea for emergency funds, three sources from inside the company said on Wednesday.

Drawing a comparison with state-owned Air India, which has a debt of over Rs 50,000 crore, Mallya said the government used Rs 35,000 crore of public funds to bail out Air India while one of finest airlines like Jet Airways was being allowed to collapse.

On Monday, in a letter to its employees, Jet Airways had said that it planned to extend its suspension of worldwide flights till Thursday as it had not received any interim funding from lenders.

An analysis of the latest data disclosed by India's Directorate General of Civil Aviation shows that Jet's lessors have, so far, sought to deregister and repossess at least 48 planes operated by Jet.

"Bankers did not want to go for a piecemeal approach which would keep the carrier flying for a few days and then again risk having Jet come back for more interim funding", a bank source told the wire service.

This has been a very hard decision but without interim funding, the airline is simply unable to conduct flight operations in a manner that delivers to the very reasonable expectations of its guests, employees, partners and service providers, the Mumbai-based airline added.

It said those with flights booked would be contacted via text or email and apologised for the disruption.

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Troubled Indian airline Jet Airways has temporarily suspended all its domestic and worldwide flights after failing to find fresh funding. It had also requested around £166m from its lenders.

"Over the last several weeks and months, the company has tried every means possible to seek both interim and long-term funding".

It described the flight suspension as "temporary".

On Tuesday, its former chairman, Naresh Goyal, reportedly withdrew plans to bid for a controlling stake in the company.

A Jet Airways spokesperson informed that the airline will continue to support the bid process initiated by the lenders.

The SBI-led consortium is looking for a buyer for Jet and a deadline passed on Friday for prospective bidders to express an interest in acquiring a 75% stake in the carrier.

Bad investments, competition from several low-priced carriers, high oil prices and a weak rupee have led to Jet's current financial predicament, analysts say.