MUMBAI -- India's Jet Airways halted all operations Wednesday after a group of lenders led by State Bank of India failed to agree to provide immediate working capital to the cash-strapped airline.
"Since no emergency funding from the lenders or any other source is forthcoming, the airline will not be able to pay for fuel or other critical services to keep the operations going," India's first private air carrier said in a statement to the Bombay Stock Exchange on Wednesday evening.
Jet Airways said it was informed of the lenders' decision late Tuesday night.
According to media reports, Jet Airways chief executive Vinay Dube had made a last-ditch effort to convince lenders to give at least 4 billion rupees ($57.6 million) as critical funding, instead of the 15 billion rupees that had been discussed.
What was once India's top private airline was operating only five planes before it decided to cancel all flights, down from 119 at its peak, according to data from the Civil Aviation Ministry. Whether it will be able to resume commercial services will depend on the outcome of an ongoing bidding process that seeks investors willing to infuse fresh capital into the airline.
Jet Airways, which is estimated to have $1.2 billion in bank debt, said the bidding will conclude on May 10.
Lenders have received expressions of interest and "bid documents have been issued to the eligible recipients today," according to the airline. "We are actively working to try and ensure that the bid process leads to a viable solution for the company."
Jet Airways is said to have been drawing interest from several foreign airlines and private equity companies, such as Air Canada, Delta Air Lines and TPG Capital. It was unclear which eligible recipients had received the bid documents.
All of Jet Airways' international flights have been canceled since Thursday. Adding to the stress, some pilots, engineers and general managers have been gathering at the airline's Mumbai headquarters to seek clarification about unpaid wages and job security.
Lenders, including State Bank of India, currently own 51% of the airline, while Abu Dhabi-based Etihad Airways holds 12%. Founder Naresh Goyal controls 25%, under a recent restructuring plan that made way for Goyal's exit as chairman.
Jet has partially defaulted on bank loans, aircraft leases, fuel bills and employee salaries since last summer. As aircraft lessors grounded airplanes, the airline reduced services, leading to a vicious cycle of declining revenue and further cut back on operation.
Jet on Feb. 14 reported its fourth consecutive quarterly loss -- 5.88 billion rupees for the October-to-December period. In August, the carrier embarked on a plan to cut costs by 20 billion rupees over the next two years.