More Airlines Collapse: Jet Airways India, Alitalia, WOW Air



Posted by Ed 5 mths ago
The troubled Indian airline Jet Airways has failed to secure emergency funding from its lenders.

The company, which last week suspended all international flights, has extended the cancellation period until Thursday.

It was India's second-largest airline by market share, until recently. But dozens of its planes have been seized by creditors, leaving the firm with only seven operational aircraft.

Chief executive Vinay Dube said Jet's board would meet on Tuesday.

Thousands of passengers have been stranded due to the firm's lack of funds. Jet now has debts of more than $1.2bn (£900m).

In a letter to staff, Mr Dube said that interim funding had "not been forthcoming thus far".

He added: "We will keep you updated on all critical developments."


Ed 5 mths ago

Ed 5 mths ago
More Airlines Collapse: Jet Airways India, Alitalia, WOW Air

Today, another major airline collapsed. Jet Airways, India’s largest private airline, announced “with immediate effect” that it was “compelled to cancel all its international and domestic flights.” It suspended operations on a “temporary” basis. It said: “Since no emergency funding from the lenders or any other source is forthcoming, the airline will not be able to pay for fuel or other critical services to keep the operations going.”

Last year, Jet Airways “suddenly” discovered serious financial issues, which led to a highly dramatic rescue effort by the main creditors (chiefly state-owned State Bank of India and private-sector ICICI Bank) and minority shareholder Etihad under the new Sashakt legislation introduced by the Indian government to deal with the chronic “sudden liquidity problems” of the giant Indian economy.

Etihad injected $35 million into the ailing Indian airline, and the State Bank of India and ICICI Bank provided $218 million emergency line of credit to meet immediate liquidity needs, such as paying salaries and keep alarmed lessors from immediately repossessing aircraft.

Apparently Jet Airways burned these fresh funds in no time, as the company’s financial situation was spinning out of control. Cabin crews, pilots and office staff went on strike over unpaid salaries. Suppliers of goods and services started cutting off deliveries “until debts are repaid at least in part.” Dutch authorities seized a Jet Airways Boeing 777-300ER at Schiphol Airport on April 12 following a court ruling over unpaid handling fees.

Ed 5 mths ago
More Airline Woes: Avianca Brazil Gets Dismembered, Korea’s Asiana Airlines Gets Taxpayer Bailout, Air India Gets Rumors of Default

It Just Doesn’t Let Up With Airlines.

Here’s an example of what should happen to an airline which has become unprofitable and failed to turn around its financial situation. On May 7, the assets of Avianca Brazil, formerly Brazil’s third-largest airline, will be auctioned off to pay creditors. To streamline sales and maximize proceeds, Avianca Brazil has been broken up in seven lots.

The best assets are prime slots at the Congonhas and Guarulhos airports (both in the São Paulo megalopolis) and will no doubt attract a few interested bidders.

But not much remains in the way of a fleet as Avianca Brazil has been ordered to return leased aircraft to the owners already last year following their failure to keep up with payments. The company’s financial situation has deteriorated to such a point the few aircraft still allowed to fly as part of the bankruptcy protection plan are required to pay landing and handling fees in advance.

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