MUMBAI — India's Jet Airways has drastically reduced operations as it looks for an investor to purchase a controlling stake in the airline and help reduce its mounting debt.
The airline, which was India's second largest by market share as recently as last year, has canceled all its international flights and is flying just seven planes as it awaits a cash injection from a consortium of lenders that has taken control of the airline.
The lenders, led by the State Bank of India, last month took control of Jet from founder Naresh Goyal as part of a debt restructuring plan.
The company was founded in 1992 as India's first independent airline when the country opened the industry to private players. Before the groundings, Jet Airways offered flights to 56 destinations in India and overseas on a fleet of 119 aircraft. The company has faltered as India's airline industry has become increasingly competitive in recent years.
The airline's debt has spiraled to 85 billion rupees ($1.2 billion). The airline, which has reported losses for the past four consecutive quarters, has defaulted on debt repayments and stopped paying staff. Abu Dhabi-based Etihad Airways owns a 24% stake in the company.
Top officials from Indian Prime Minister Narendra Modi's office met with Civil Aviation Secretary Pradeep Singh Kharola Friday to discuss Jet Airways, people familiar with the matter said.
Mr. Goyal and his wife, Anita, last month resigned from the board of the company as part of the restructuring plan in which the lenders agreed to infuse 15 billion rupees into Jet Airways.
Parties had until Friday to submit expressions of interest in making a bid for a controlling stake in Jet Airways.
A sale or issuance of shares to investors was expected to be completed in the June quarter, Jet Airways said last month. A spokesman for State Bank of India declined to comment. SBI Capital Markets is handling the expression of interest from various bidders.
Jet Airways' 22,000 workers haven't been paid for the past month, a person familiar with the matter said. Senior staff including pilots and engineers haven't been paid for three months. Employees held a protest at Delhi's international airport Saturday calling for the intervention of Mr. Modi.
The airline is working to get passengers affected by the cancellations onto flights with alternative airlines or is offering refunds, a spokesman for Jet Airways said.
BY CORINNE ABRAMS AND DEBIPRASAD NAYAK