India's Jet Airways defaults on debt payment to banks

Jet Airways is facing financial difficulties and owes money to pilots, lessors and vendors.
Jet Airways is facing financial difficulties and owes money to pilots, lessors and vendors.PHOTO: REUTERS

BENGALURU (REUTERS) - Debt-laden Jet Airways Ltd has delayed the payment to a consortium of Indian banks, led by State Bank of India Ltd, the airline said late on Tuesday (Jan 1).

The payment of interest and principal instalment was delayed "due to temporary cash flow mismatch" and the company is in talks with the consortium. The deadline for the payment was Dec 31, 2018, Jet said

The 25-year-old airline is facing financial difficulties and owes money to pilots, lessors and vendors. Intense pricing competition, a weak rupee and rising fuel costs weighed on Indian airlines in 2018.

Jet and its second-largest shareholder Etihad Airways are in talks with bankers on a rescue deal that may involve the Abu Dhabi-based airline increasing its stake from 24 per cent.