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  1. Air pocket! Jet Airways mulls grounding 23 Boeing 737s to cut losses

Air pocket! Jet Airways mulls grounding 23 Boeing 737s to cut losses

In its fleet of 124 aircraft, Jet has 82 different variants of Boeing 737s including Boeing 737-700, 737-800, 737-900 and 737-900ER and this narrow body aircraft is its workhorse for domestic operations.

By: | Mumbai | Updated: October 12, 2018 8:58 AM
Jet Airways grounding 23 Boeing 737s to cut losses

The management of Jet Airways is understood to have conveyed to its senior pilots that it might have to ground 23 Boeing 737s to cut down losses. At a meeting held on October 9 with the National Aviators Guild (NAG), the pilot union of Jet, the airline also informed that it won’t be able to meet the commitment to pay pilots and engineering staff pending salaries for September.

“The management suggested it is looking at grounding 23 Boeing 737s operating on domestic routes to mitigate losses,” one of the senior pilots present in the meeting confirmed to FE. Vinay Dube, Jet’s CEO, and Rahul Taneja, chief people officer, were among those present, sources said.

In its fleet of 124 aircraft, Jet has 82 different variants of Boeing 737s including Boeing 737-700, 737-800, 737-900 and 737-900ER and this narrow body aircraft is its workhorse for domestic operations.

In response to FE’s query on the issue, a Jet Airways spokesperson said, “Jet Airways categorically denies your information which is factually incorrect and misleading. The airline also urges the publication to refrain from reporting speculative information being circulated via sources with malicious intent.”

Aviation experts said grounding of aircraft happens in two scenarios. In the first case, it is done to curtail bleeding due to operational losses as direct operating costs do not get recovered by revenues. In the second case, grounding takes place if an airline is facing issues with its lease payments and there are pending dues, or if there is lack of spares which is due to payments not made to vendors or suppliers.

Jet’s first quarter losses were at Rs 1,323 crore. As on June 2018, it had gross debt of Rs 8,620 crore, of which Rs 1,968 crore was related to aircraft. The airline’s accumulated losses stand at Rs 10,878 crore and it is currently working on a turnaround plan to save Rs 2,000 crore over a couple of years through several initiatives that the board had approved in August.

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