Jet Airways shares plunge 34% as airline suspends all operations
Jet Airways India Ltd digs deeper into the financial crisis, as the shares of the airline fell over 34 per cent in today's session. Once ranked India’s second-largest airline, Jet has suspended its operations temporarily on Wednesday after failing to secure emergency funds.
Jet Airways India Ltd digs deeper into the financial crisis, as the shares of the airline fell over 34 per cent in today's session. Once ranked India’s second-largest airline, Jet has suspended its operations temporarily on Wednesday after failing to secure emergency funds. The cash strapped commercial airlines has seen the biggest fall in its shares since listing. The stock was as low as Rs 158.70 on National Stock Exchange (NSE), down by 34.01 per cent from its previous closing. The stock was listed on exchanges on 14th March 2005 at an issue price of Rs 1,100 per share. In today's trading session, Jet was trading at Rs 175.45 on NSE At 10.15 am, the down 27 per cent from previous closing price.
Ajay Bodke, CEO PMS Prabhudas Lilladher told Zee Business online, "It is indeed a tragic day for the Indian aviation sector. Jet was the pioneer among private sector full-service carriers in India and consistently figured among the most-loved airlines for its warm hospitality and stellar service standards. Jet's failure follows a raft of other failures in the sector like Kingfisher, Deccan, Sahara etc. The national carrier Air India is a basket case kept alive by the government by infusing thousands of crores of taxpayers revenues. It is a wake-up call for the aviation authorities to seriously ponder as to why India is emerging as a treacherous graveyard for Indian carriers. It is a reflection not only on the sub-optimal management of the operations by the owners of these carriers but also of the sheer neglect by the aviation mandarins of incessant pleas from the industry to introduce sensible & reasonable taxation & tariff policies as well as other expenses charged by the airports."
Earlier on Wednesday, Vinay Dube, CEO, Jet Airways in a letter to the employees said that the decision to shut the operations temporarily was taken after painstaking evaluation of all alternatives and guidance and advice of the board. "A decision like this is never easy to make, but without the interim funding, which we have been repeatedly requesting for, we are simply unable to conduct flight operations in a manner that delivers to the very reasonable expectations of our guests, employees, partners and service providers," he said.
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The ailing airlines company had requested banks to infuse funds of Rs 400 crore to help it keep his aircraft in air, till the lenders find a buyer. While, analysts of the markets say that the banks have rejected the plea of Jet Airways, due to no clarity on cash flows in future.
The airline said that it has been promised with no emergency funding from the lenders or from any other source and is not in the condition to pay for fuel or other critical services to keep the operations driving. Consequently, with immediate effect, Jet Airways is compelled to cancel all its international and domestic flights, the company said in a notice to BSE.
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