Jet Airways likely to lose Boeing 777 fleet as US lender bank approaches DGCA

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Published: June 13, 2019 12:51:09 AM

Jet possessed 10 B777-300 ER aircraft, which were funded by the Washington-based bank in 2005-06

Jet Airways likely to lose Boeing 777 fleet as US lender bank approaches DGCAJet Airways likely to lose Boeing 777 fleet as US lender bank approaches DGCA

Grounded Jet Airways could lose its wide-body Boeing 777 fleet as its lender US Export-Import (Exim) Bank has written to the Directorate General of Civil Aviation (DGCA) to de-register the aircraft, people aware of the development said.

Jet possessed 10 B777-300 ER aircraft, which were funded by the Washington-based bank in 2005-06. Six of those Boeing aircraft were given as collateral for the loan. The full-service carrier has remaining liability of around `200 crore towards the official export credit agency of the US. The current list price of new Boeing 777-300 ER aircraft is around `2,600 crore at the current exchange rates.

The full-service carrier shut all operations on April 17 due to a cash crunch.

Jet’s domestic lenders headed by State Bank of India (SBI) were contemplating to release the planes by paying the outstanding dues to the US Exim Bank after the aircraft were repossessed in April. But no decision has been taken by the consortium yet. Banks are looking to revive Jet and have pinned hopes on the Hinduja Group and Etihad Airways to pick up stakes in the beleaguered carrier.

“A request has been sent to deregister B777 aircraft,” one of the person cited above said. The DGCA has so far deregistered around 100 aircraft including Boeing 737 operated by Jet over non-payment of lease rentals and loan default by the Mumbai-based carrier. SpiceJet has taken more than 30 ex-Jet aircraft, while Vistara has got six such planes. Jet had a fleet of 119 aircraft at the end of December 2018.

According to sources, the US Exim Bank is likely to give the planes to Air India for preventive maintenance. Air India already houses one B777 aircraft from Jet’s fleet at its maintenance, repair and overhaul (MRO) facility in Nagpur facility.

“Under preventive maintenance, checks like turning engine on-off for some time are conducted daily,” an Air India official explained.

Operational creditors have filed insolvency petitions against Jet with the National Company Law Tribunal in Mumbai, which is likely to take up the pleas on Thursday.

Jet owes more than `8,000 crore to a consortium of domestic banks, while it has other debt pile by way of accumulated losses, vendor and salary dues.

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