NEW DELHI: India’s Jet Airways has been forced to ground more than three quarters of its fleet after failing to pay lessors, as the debt-laden carrier struggles to secure bailout funds promised by state-run banks.
Jet struck a deal earlier this year to escape bankruptcy under which State Bank of India (SBI) and other lenders were to pump in $218 million and temporarily own a majority stake in the airline. But it has not got any of the funds so far and has not paid its employees for March, said a person with direct knowledge of the matter.
Once India’s leading full-service airline, Jet was founded 25 years ago by Naresh Goyal at a time when state-run carrier Air India was the only real formidable opponent. In recent years, however, Jet has struggled to compete with low-cost carriers such as IndiGo and SpiceJet that now dominate Indian skies.
Jet’s operational fleet stood at 28 airplanes as of Wednesday, a company spokesman told Reuters, versus 119 planes last year.
At least 69 aircraft have been grounded due to money owed to lessors, showed stock exchange filings by Jet, while the remainder are out of service for maintenance.
Some lessors with direct knowledge of the matter said Jet had told them it would pay for one month’s rental and maintenance by the end of last week, but no payment had been received.
“We already have five to six months of delinquencies and we were promised just one month and even that hasn’t been paid. This is very disappointing,” said one of the people, who declined to be identified due to the sensitivity of the matter.
Jet did not respond to specific queries on lessor and salary payments but said in a statement that the airline has informed the aviation regulator it is operating a curtailed schedule.
The Jet rescue plan itself has come under a cloud. It was based on a directive issued by the country’s central bank last year but India’s top court quashed that directive on Tuesday.
SBI and Jet did not respond to requests for comment on the court ruling. But some such as Madhukar Ladha, an equity analyst at Mumbai-based firm HDFC Securities, did not see Jet’s rescue package being in peril as the deal was already agreed.
After the bailout was announced, Jet told India’s aviation regulator it would not ground any more planes and would fly 40 more aircraft by the end of April, taking its operational fleet to 75 planes.
But late on Tuesday, Jet said it grounded 15 planes.
With a smaller operating fleet, Jet has given pilots and cabin crew the option of flexible working days and taking extended leave with or without pay, showed a note to staff reviewed by Reuters.
Even as the aircraft groundings are currently impacting Jet’s operations, the airline needs to rationalize its fleet and focus on profitable routes, said HDFC Securities’ Ladha.
“The situation remains precarious,” he said.
India’s Jet Airways grounds three quarters of fleet as it awaits bailout funds
India’s Jet Airways grounds three quarters of fleet as it awaits bailout funds
- Jet Airways struck a deal earlier this year with State Bank of India and other lenders to escape bankruptcy
- Jet’s operational fleet stood at 28 airplanes as of Wednesday, versus 119 planes last year
Saudi Arabia’s cultural sector is a new economic engine between Riyadh and Paris, says ambassador
RIYADH: Culture has become a fundamental pillar in bilateral relations between France and Saudi Arabia, according to the French Ambassador to the Kingdom, Patrick Maisonnave.
Maisonnave noted its connection to the entertainment and tourism sectors, which makes it a new engine for economic cooperation between Riyadh and Paris.
He told Al-Eqtisadiah during the opening ceremony of La Fabrique in the Jax district of Diriyah that cultural cooperation with Saudi Arabia is an important element for its attractiveness in the coming decades.
La Fabrique is a space dedicated to artistic creativity and cultural exchange, launched as part of a partnership between the Riyadh Art program and the French Institute in Riyadh.
Running from Jan. 22 until Feb 14, the initiative will provide an open workspace that allows artists to develop and work on their ideas within a collaborative framework.
Launching La Fabrique as a space dedicated to artistic creativity
The ambassador highlighted that the transformation journey in the Kingdom under Vision 2030 has contributed to the emergence of a new generation of young artists and creators, alongside a growing desire in Saudi society to connect with culture and to embrace what is happening globally.
He affirmed that the relationship between the two countries is “profound, even cultural par excellence,” with interest from the Saudi side in French culture, matched by increasing interest from the French public and cultural institutions unfolding in the Kingdom.
Latest estimates indicate that the culture-based economy represents about 2.3 percent of France’s gross domestic product, equivalent to more than 90 billion euros ($106.4 billion) in annual revenues, according to government data. The sector directly employs more than 600,000 people, making it one of the largest job-creating sectors in the fields of creativity, publishing, cinema, and visual arts.
Saudi Arabia benefiting from French experience in the cultural field
Maisonnave explained that France possesses established cultural institutions, while Saudi Arabia is building a strong cultural sector, which opens the door for cooperation opportunities.
This comes as an extension of the signing of 10 major cultural agreements a year ago between French and Saudi institutions, aiming to enhance cooperation and transfer French expertise and knowledge to contribute to the development of the cultural system in the Kingdom.
He added that experiences like La Fabrique provide an opportunity to meet the new generation of Saudi creators, who have expressed interest in connecting with French institutions and artists in Paris and France.
La Fabrique encompasses a space for multiple contemporary artistic practices, including performance arts, digital and interactive arts, photography, music, and cinema, while providing the public with an opportunity to witness the stages of producing artistic works and interact with the creative process.
