Lenders of India’s Jet Airways have announced they will start insolvency proceedings after a failed attempt to save the cash-strapped airline.
The carrier ceased all flights in April as it continued the search for a rescue deal, with the State Bank of India denying its request for interim funding. Jet Airways was struggling under the weight of nearly £900 million of debt.
Its fleet had been rapidly diminishing in the weeks leading up to the eventual suspension of operations.
Pressure from potential investors forced founder and chairman Naresh Goyal and his wife step down from their positions with the company, but still the extra funding could not be secured.
Several parties had expressed interest in buying Jet Airways, including Wizz Air owner Indigo Partners, but no deal was agreed.
Now the airline’s lenders, a consortium of state banks, have said in a statement: “After due deliberations, lenders have decided to seek resolution under Insolvency and Bankruptcy Code. Lenders led by State Bank of India have been taking efforts to find a resolution for Jet Airways outside IBC but in view of the above, lenders have decided to seek a resolution within the IBC process.”
The decision will bring a close to the legacy of Jet Airways, which was founded in 1993.
The airline’s collapse has prompted former codeshare partner Virgin Atlantic to re-launch flights between London and Mumbai on its own, while Delta will reinstate its JFK-Mumbai service after the US and UAE reached an agreement on a dispute over the Open Skies arrangement.