India’s Jet Airways has been forced to ground more of its aircraft because of lease payment defaults, as negotiations continue over a bailout plan and an ownership reshuffle for the Mumbai-based carrier.

Jet Airways admitted in a Feb. 7 stock market filing that it had grounded four aircraft after missing lease payments. Since then it has added to the total in six more filings. With the latest addition of two aircraft on March 4, the carrier’s list of grounded aircraft has reached 25.  

The airline reiterated its earlier comment by saying it is “actively involved with all its aircraft lessors and regularly provides them with updates on the efforts undertaken by the company to improve its liquidity.” Jet said its lessors “have been supportive of the company's efforts in this regard.” It has not disclosed which lessors’ aircraft are affected by the groundings.

Jet’s board recently approved a restructuring initiative known as a bank-led provisional resolution plan (BLPRP). The airline said its restructuring strategy will address a “funding gap” of nearly 85 billion rupees ($1.2 billion). The gap “will be met with an appropriate mix” of equity infusion, debt restructuring, and the sale, sale-leaseback and refinancing of aircraft. Efforts to sell a stake in its loyalty program are also continuing.

A key first step of the plan will see a consortium of banks convert its debt into equity to become Jet Airways’ largest shareholder. However, further capital injections are likely from other stakeholders, including part-owner Etihad Airways, that would further alter the ownership structure. Jet founder Naresh Goyal is expected to see his share slip significantly, which would mean he loses his role as chairman and control of the carrier.

On March 1, stock exchange regulators asked Jet to clarify news reports that Goyal was stepping down. The airline replied that its board has made no decision that would require regulatory disclosure, although it noted that the BLPRP will address “appropriate governance structure including board composition.”

Adrian Schofield, adrian.schofield@informa.com