Debt-stricken Jet Airways cancels all international flights

Flights resumed, but not to London

By Bard Wilkinson, CNN
Aldo Bidini via Wikimedia Commons

(CNN) - Struggling Indian airline Jet Airways has canceled all its international flights, raising fears that it may be close to collapse.

The airline said in a statement on Friday that it "has canceled its international operations from 12th to 15th April."

All of Jet's long-haul services — including to London, Paris and Amsterdam — were suspended from Thursday night, but a spokesperson initially said earlier Friday that all long-haul flights had resumed.

However, the airline later announced the cancellation of all international flights until Monday, adding that it was "working to minimize guest inconvenience."

Thursday's cancellation of flights prompted India's Aviation Minister, Suresh Prabhu, to tweet on Friday that his ministry would "review issues related to Jet Airways" and "take necessary steps to minimize passenger inconvenience and ensure their safety."

A collapse of the airline would tarnish Prime Minister Narendra Modi's pro-business credentials as Indians vote in elections that started on Thursday. The failure of a major airline would put thousands of jobs at risk.

Jet Airways has already canceled thousands of domestic and international flights as planes were grounded over the non-payment of fees to aircraft leasing companies. It told the Bombay Stock Exchange Thursday that it had grounded 10 more planes due to unpaid dues.

Last month the company's founder was forced to quit as part of a government-backed bailout. Naresh Goyal stepped down as chairman and resigned from the board, allowing banks to take control and overhaul the company.

India's largest public bank, the State Bank of India (SBI), has been leading the consortium of creditors, which started the stake sale process on Monday. Several airlines, including Etihad, are interested in bidding, according to reports.

Etihad already owns a 24% stake in Jet Airways. A spokesperson for the UAE-based airline declined to comment on the bidding process.

India is the fastest-growing aviation market in the world but competition is fierce. Airlines struggle to make money given the intense pressure on fares. Rising oil prices and a volatile Indian currency have made life even harder.

Jet Airways has racked up huge losses and exhausted the patience of its creditors. Profits at market leader IndiGo have also suffered and the government was forced to pour hundreds of millions of dollars into the national carrier, Air India, after a failed privatization attempt early last year.

CNN's Swati Gupta and Zahraa Alkhalisi contributed to this article.

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