NEW DELHI (AP) — Jet Airways, once India’s largest airline and one with $8 billion in pending orders with Boeing, announced on Wednesday that it is suspending all operations after failing to raise enough money to run its services.
The company said it has been informed by its lenders, led by state-run State Bank of India, that they are unable to consider its request for funding to keep flying.
“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,” it said in a statement.
“It has decided to go ahead with temporary suspension of operations,” the airline said.
Its last flight was scheduled to fly to New Delhi from the northern Indian city of Amritsar on Wednesday night.
On Tuesday, Jet Airways’ former chairman, Naresh Goyal, reportedly withdrew plans to bid for a controlling stake in the company. Goyal founded Jet Airways in 1992 and saw it soar to become India’s largest airline.
It was not immediately clear who else might bid for the company. Etihad Aviation Group purchased a 24% stake in 2013.
“Finding new investors was always going to be a tall order for Jet Airways,” said Loizos Heracleous, an aviation expert at Warwick Business School in Britain. “Increases in industry profitability after 2011 were aided by lower fuel prices. With fuel prices on an upward trend since 2016, the performance of some airlines has taken a hit.”
The airline had 119 planes on Dec. 31, when it first defaulted on some of its more than $1 billion in debt. This week, it reduced its operations to only seven aircraft flying domestic routes.
Jet has pending orders for 125 single-aisle 737 MAXs as well as 10 twin-aisle 787-9 Dreamliners. Those orders are valued at more than $17 billion at list prices, but aircraft valuation consultancy Avitas estimates the real value after standard industry discounts at about $8 billion.
The airline reported a net loss in the quarter that ended in December of 5.8 billion rupees, about $83 million. Jet Airways pilots complained that they had not received a salary in four months.
The New Delhi Television news channel said 20,000 jobs at the airline were at stake.