India’s cash-strapped Jet Airways is to be subjected to an audit to make sure it is able to maintain safety standards while dealing with its financial problems.
The move by India’s aviation regulator follows the deferment of the airline’s quarterly results for the three months to June, which auditors refused to approve amid growing concerns over Jet’s ability to remain solvent.
"Financial difficulties and their impact on operations and maintenance call for an audit to check if the airline is facing an issue on payments to vendors, oil companies, and aircraft lessors," an official from the Directorate General of Civil Aviation.
The airline, which announced last week that it is looking to cut its maintenance costs, said it was aware of the audit and is preparing for it. "At Jet, safety is of paramount importance," a spokesperson said.
The airline has acknowledged it is in some financial difficulty but has not defaulted on payments to creditors. However, is has imposed pay cuts of up to 25% for senior management.
It has been reported that the airline has approached overseas lenders seeking a loan waiver of $185 million of debt.
