Jet Airways to default on debenture payments, ground 4 more aircraft

Debt-ridden airline operator Jet Airways said it was grounding four more aircraft due to non-payment of lease amounts, and that it will also default on interest payments to its debenture holders due tomorrow.

It is estimated a total of 40 plus aircrafts have been grounded by the airline so far.

“..the payment off interest due on 19 March, 2019 to the debenture holder will be delayed owning to temporary liquidity constraints,” the company said.

Debentures are similar to bonds, and are debt instruments that promise its holders a fixed interest, usually payable every quarter.

In a separate statement, it said it was grounding another four aircraft “due to non-payment of amounts outstanding to lessors under their respective least agreements.”

It said it is “engaged with all its aircraft lessors and regularly provides them with updates on the efforts undertaken by the company to improve its liquidity.”

“Aircraft lessors have been supportive of the company’s efforts in this regard,” it added.

It said it is “proactively informing and re-accommodating” its passengers affected by flight cancellations.

Jet Airways, once India’s largest private sector airline, has been hit hard due to competition from low-cost carriers, as well as an overall downturn in the aviation market due to a slowing economy and higher fuel costs.