In the last two days I’ve been hearing rumours that JetAirways of India is again teetering on the brink of financial collapse. Leasing companies are said to be deeply concerned about the late, or non-payment of lease agreements, and at least four aircraft have been grounded as their owners look to take back possession, something they’re usually loathe to do, and Indian law makes very difficult to achieve. Airlines in India use groundings as a way to prevent repossession because the countries laws don’t really allow it. Kingfisher did the same thing – but found that many of its aircraft were snatched back as soon as they landed in a foreign airport.
According to some of the airline databases at least three of the latest 737-Max 8’s leased from GECAS are listed as stored.
The airline works with as many as twenty different leasing companies and has been tactical over which aircraft they didn’t pay for, spreading it over several lessors rather than giving one the ammunition it needs to launch a mass re-possession.
JetAirways seems to be constantly playing for time, but the fact it’s only just had a another bailout – which seems to have done nothing more than get it through another month, indicates it must be hemorrhaging cash.
The airline is saying nothing – they almost certainly can’t deny it but there is no way they will start a panic and put off customers buying tickets – they need the cash to keep operating.
One has to ask what the Indian regulator is doing about this, or are they just sitting on their hands, as has happened so often in the past, until something bad happens?
JetAirways was forced to make a statement – a not very informative one – to the Bombay Stock Exchange which was basically just wordy near meaningless spin.
JetAirways is part owned by Etihad, and they recently gave it a sizeable cash advance despite their own economically challenging issues, that have seen drastic reductions in aircraft orders, existing aircraft stored and sold, the near-elimination of their freighter fleet and laid off pilots.
JetAirways operates 115 aircraft, 82 of them variants of the 737, most are 738’s and they’re already operating the 737 Max 8. They also have 10 777’s and 8 A330’s along with 15 ATR’s. The competition in India is brutal and the airline’s found it hard to adapt.