Jet Airways lessors scrap deals over dues
Some lessors of India’s Jet Airways have begun terminating lease deals over unpaid dues and are preparing to move the leased planes abroad, escalating a crisis for the carrier, five sources with knowledge of the matter told Reuters.
Two lessors have applied to the Directorate-General of Civil Aviation (DGCA), India’s aviation regulator, to deregister at least five planes leased to cash-strapped Jet, three of the sources said.
Termination of lease agreements normally precedes applications made to the DGCA.
Jet has delayed payments to its pilots, suppliers and lessors for months and defaulted on loans after racking up over $1 billion in debt.
While it is now meeting some of its payments, its survival hinges on emergency funding from the country’s main state-backed banks.
Frustrated by the unpaid dues, Jet’s lessors, including many of the world’s biggest players such as GE Capital Aviation Services (GECAS), Aercap Holdings and BOC Aviation, have already taken control of some their planes, sources said.
That has led to the grounding of nearly a third of Jet’s 119-aircraft fleet. Once the planes are deregistered, they can be taken out of the country and leased to other airlines.
One of the sources with direct knowledge of the matter said that of the planes being deregistered, two are potentially being flown to China and one to Ireland.
Another industry source said GECAS and Aercap had filed an application to deregister a total of five planes.
Lease terminations could hit the already fragile confidence of Jet’s business partners. Jet is not aware of the above developments, a company spokesman said in a statement, adding that the addition or exit of aircraft in an airline’s fleet is a dynamic and continuous exercise and depends on the nature of the lease agreement.
The airline provides regular updates on its efforts to improve liquidity to its lessors, who have been supportive, the spokesman said, adding that the company does not comment on specific relationships.
AerCap declined to comment and there was no immediate response from GECAS to a query sent outside normal business hours