JetAirways of India yesterday issue their 11th update since February on the number of grounded Aircraft, which now stands at 40, plus 5 737-Max-8’s.
The airline grounded more aircraft as it was unable to pay for the leases on them, and yesterday missed a major interest payment on a substantial part of its debt, and that’s not the first time that’s happened. In a statement it basically said it was short of cash.
The length of time its taking to renegotiate the rescue plan and put in place a restructuring is simply making things worse day by day, like death by a thousand cuts. The longer it takes, the more debt and the larger the lease payment arrears become, requiring yet more from those prepared to bail it out.
The biggest stumbling block to a happy resolution is the Etihad Group’s substantial share holding and wether or not they are prepared to cough up yet more money. When it comes to standing by their investments, Etihad is normally running for the hills.
With a massive loss of $1.8 billion USD posted only last week, Etihad would have to borrow even more money to prop up its investment, all that remains of any significance from its “partnership programme” that once included AlItalia, AirBerlin and Darwin (Switzerland). Etihad’s decision to stop investing in those basket cases led to their immediate collapse. Will it let JetAirways go the same way?
India’s lack of corporate bankruptcy laws leave investors, and airline in a strange limbo land. It can’t go bankrupt as that legal state doesn’t exist so it’s effectively operating on existing fares, spare change it found down the back of the CEO’s sofa and goodwill. Add to that the self-interest of those owed money, who don’t want to see it drift into the muddy waters of a Kingfisher style collapse, and their chance of recouping their money with it, where it ends up nobody seems really certain.