Some lessors may end deals with Jet over unpaid dues
NEW DELHI/ SINGAPORE: Some lessors of Jet Airways (India) Ltd have begun terminating lease deals over unpaid dues and are preparing to move the leased planes abroad, escalating a crisis for the cash-strapped carrier, five persons with knowledge of the matter told Reuters.
Two lessors have applied to the Directorate General of Civil Aviation (DGCA) to deregister at least five planes leased to Jet, three of the persons said. Termination of lease agreements normally precedes applications made to the DGCA.
Jet has delayed payments to its pilots, suppliers and lessors for months and defaulted on loans after racking up over $1 billion in debt.
While it is now meeting some of its payments, it’s survival hinges on emergency funding from the country’s main statebacked banks.
Frustrated by the unpaid dues, Jet’s lessors, including many of the world’s biggest players such as GE Capital Aviation Services (GECAS), Aercap Holdings and BOC Aviation have already taken control of some their planes, people familiar with the matter said, leading to the grounding of nearly a third of its 119 aircraft fleet.
Once the planes are deregistered, they can be taken out of the country and leased to other airlines.
One of the people with direct knowledge of the matter said that of the planes being deregistered, two are potentially being flown to China and one to Ireland.
Another industry person said GECAS and Aercap had filed an application to deregister a total of five planes.
Lease terminations could hit the already fragile confidence of business partners of Jet.
Jet did not respond to requests for comment. Aercap declined to comment and there was no immediate response from GECAS to a query sent outside normal business hours.
All the people declined to be identified due to the sensitivity of the matter.
PILOTS SEEK GOVT’S HELP TO RECOVER DUES
Cash-strapped Indian carrier’s pilots union has for the first time sought the government’s help to recover pending salaries and dues from the airline after their pleas to the management have fallen on “deaf ears”.
In a letter to labour minister, National Aviators Guild, which represents the majority of Jet’s pilots, has asked that the airline immediately pay their outstanding salaries and allowances till date with interest.
“This situation is leading to extreme tension and frustration amongst our members, hardly an ideal situation for pilots in cockpit,” captain Karan Arora, president of the union, said in the letter dated March 6, seen by Reuters.
Jet di d not i mmediately respond to a request for comment.