Jet Airways’ consortium of lenders have finally lost patience and opted to send it for bankruptcy resolution to recover at least some of their dues.
The airline stopped flying on April 17 and there is no likelihood of a buyer on the horizon.
"After due deliberations, the lenders have decided to seek resolution for Jet Airways under the bankruptcy code since only a conditional bid was received," the State Bank of India said, which leads the consortium of lenders effectively controlling what is left of the airline.
The conditional bid it referred to was from shareholder Etihad Airways which refused to bankroll its recovery and would only fund a minority investment.
There was hope for a joint deal between Etihad and Mumbai based conglomerate Hinduja Group but those talks seemingly went nowhere.
Once India’s largest private airline, Jet Airways owes its lenders about $1.2 billion and has precious few assets to sell off.
Just six months ago it had a fleet of more than 100 planes but most of these have been grounded and leased out to other carriers due to defaulting on lessor payments.
Overall its liabilities are thought to be more than $3 billion, which include several months’ salary for thousands of employees and unpaid bills owed to dozens of other creditors.
Its main sellable assets are the few aircraft it owned, two lucrative London Heathrow airport slots and a minority stake in its loyalty program JPMiles.
However bankruptcy proceedings could take some time as federal authorities have launched a probe into possible money laundering and other irregularities at the airline.
Former chairman and founder Naresh Goyal and several other former executives have been banned from leaving India.
