Signage for Jet Airways India Ltd. is displayed at the airline's headquarters in Mumbai, India, on Monday, April 15, 2019. Picture: DHIRAJ SINGH / BLOOMBERG
Signage for Jet Airways India Ltd. is displayed at the airline's headquarters in Mumbai, India, on Monday, April 15, 2019. Picture: DHIRAJ SINGH / BLOOMBERG

New Delhi/Bengaluru — Potential bidders for Jet Airways have reportedly not shown any firm interest in bailing out the struggling airline, increasing the chances of  bankruptcy proceedings.

Jet, once India’s largest private airline, was forced to stop all flight operations on April 17 after its lenders declined to extend more funds to keep the carrier going.

“Companies that had submitted initial expressions of interest are not following up with binding bids,” said an informed  source.

Another source involved in the process said bidders had until May 10 to come up with binding offers, a few days later than the April 30 date indicated in April by lead lender State Bank of India (SBI). 

Both sources, speaking on Thursday, declined to be identified because the talks are not public.

Jet, saddled with roughly $1.2bn in bank debt, and SBI did not respond to requests for comment.

Earlier on Thursday, The Economic Times, citing sources, reported that three of the four qualified bidders — Etihad Airways, TPG Capital and Indigo Partners — had not signed the nondisclosure agreements necessary for conducting due diligence.

The Indian civil aviation regulator has said that lessors have already requested the return of more than half of Jet’s fleet of about 115 aircraft, with the carrier voluntarily returning some.

Jet’s share price was 12% down at the close, having earlier fallen more than 20% to their lowest in a decade.

Employees of the company have said they have not been paid for months and plan to take the airline to India’s bankruptcy court (NCLT), a process allowed under Indian law.

“Right now we’re more worried about the bidding deadline,” said a Jet Airways pilot. “We will obviously have to take it to NCLT and [go through] with the proceedings,” he added.

As funds ran out, Jet also struggled to pay vendors and employees.

“In the last four or five months, payments became highly erratic,” Vispi Patel, an executive at Weizmann Forex, which counts Jet as a client, said.

Patel said Jet failed to respond to its calls and e-mails. As a result, the FX company had reclaimed money from some forex cards issued to pilots and cabin crew for international trips.

Sources said that Jet’s lenders had not yet made a decision on whether to push for bankruptcy, but industry experts said dragging the airline through bankruptcy court might be counterproductive.

“If there are no bidders through this process, then the airline will shut,” said analyst Vijayant Gupta of Edelweiss Securities. “Lenders have no incentive to take Jet to the bankruptcy court because there are no hard assets to liquidate.”

The Economic Times reported that Jet’s management met executives of Mahindra, Adani, Tata group and Reliance Industries in the past two weeks on a rescue, but no conglomerate responded positively.

Those companies either did not respond to e-mails seeking comments, or declined to.