Jet Airways Ltd shares yesterday plunged more than 32 percent, hours after the Indian carrier’s final flight landed following a decision to ground its entire fleet.
The Mumbai-based carrier is on the edge of bankruptcy and has failed to secure emergency funding from banks, forcing it late on Wednesday to suspend all operations.
Jet’s stock fell more than 32 percent to 162.15 rupees on the Bombay Stock Exchange.
Photo: EPA-EFE
It was worth more than four times that a year ago.
The lenders that control the airline yesterday said they were focusing on finding a buyer for Jet, which was until recently India’s second-biggest carrier by market share.
“Lenders are reasonably hopeful that the bid process is likely to be successful in determining fair value of the enterprise in a transparent manner,” they said in a statement.
The State Bank of India-led consortium is looking to sell a controlling stake in Jet and has shortlisted four potential buyers, including Etihad Airways PJSC, which already owns 24 percent.
The four have until May 10 to submit formal bids.
Until then, the carrier’s remaining fleet is grounded, with a final flight from Amritsar to Mumbai landing in the early hours of yesterday.
The chairman of state-carrier Air India, which has been bailed out by the government several times, said Jet’s temporary closure was a setback for India’s aviation sector.
“We have in the past witnessed many airlines shutting shop and it is time to appreciate that the razor thin margins which airlines are forced to operate within a competitive environment results in a scenario that encourages unsustainability,” Ashwani Lohani said in a Facebook post.
Jet, which has debts of more than US$1 billion, has been in a tailspin for months. It has defaulted on loans and failed to pay many staff since the start of the year.
Bad investments, competition from several low-cost carriers, high oil prices and a weak rupee contributed to Jet’s financial demise, experts said.
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