INSUBCONTINENT EXCLUSIVE:
Jet controls over a sixth of a market experiencing an unprecedented boom in air travel.Crisis talks between cash-strapped Jet Airways and
aircraft lessors have failed to ease a row over late payments, prompting some lessors to explore taking back aircraft, three people familiar
with matter told Reuters.In what one of people described as an ill-tempered showdown between airline and some of world's leading leasing
firms, Jet's main lender State Bank of India sought to provide reassurance that country's biggest full-service carrier is doing all it can
to pay its staff, suppliers and creditors."Jet has been delinquent for many months
Nobody wants to get in a situation where problems worsen and it becomes even more difficult to take out aircraft," one of people said.Jet
controls over a sixth of a market experiencing an unprecedented boom in air travel
Yet high fuel taxes, a weak rupee and price competition have squeezed profitability, leaving Jet with Rs 8,052 crore ($1.14 billion) in net
debt as at end of September and defaulting on payments.The airline had previously told some lessors it would clear arrears by December 31,
but was unable do so, people close to matter said.At meetings on Tuesday, held at SBI's headquarters in Mumbai's business district, bank's
Chairman Rajnish Kumar was asked how Jet planned to raise equity or debt, said one of people - an attendee, who found responses lacked
sufficient detail.Other attendees included Jet's management team, including airline's founder and Chairman Naresh Goyal, as well as a senior
adviser of Etihad Airways, which owns 24 per cent of Jet and which did not provide any assurances, person said.An official from Punjab
National Bank later said lenders have "in-principle" agreed to extend some help to Jet, but details on mechanics of it are still being
worked out.Some lessors have engaged with lawyers, are working with their technical teams about repossession and are monitoring planes, but
situation could be complicated by a new bankruptcy law that allows up to 270 days where no action is permitted against debtor or its assets,
person said.Lessors such as GE Capital Aviation Services (GECAS) SMBC Aviation Capital and Jackson Square are looking into stopping transfer
of Boeing Co 737 MAX jets that had been due for delivery to Jet, person said.A second person said deliveries of 737 MAX jets from lessors
had been behind schedule since November.Avolon, DAE Aerospace, BOC Aviation and Aircastle also attended meetings along with GECAS and SMBC,
one of people said, declining to specify which are considering reclaiming planes.Jet Airways, in a statement on Friday, said airline is
working on its turnaround strategy and updating its partners, in real time, on efforts taken to improve its liquidity."A comprehensive plan
that will ensure business sustainability, preserve value, and enable company to honour its obligations was outlined," a Jet spokesman said
in statement, adding that meeting took place in an atmosphere of cordiality and mutual appreciation.The turnaround plan involves creating a
competitive cost structure and restructuring balance sheet, among other things, and is expected to "deliver a positive impact on financials
of company," he said.SBI and SMBC Aviation did not immediately respond to requests for comment
DAE Aerospace, GECAS, Aircastle and Jackson Square did not respond outside of regular business hours
Etihad, BOC Aviation and Avolon declined to comment.The people familiar with talks were not authorised to speak publicly on matter and so
declined to be identified.Financial helpJet, controlled by Goyal, has turned to Etihad for financial help
However, Abu Dhabi airline is not "in any position to sink new equity into Jet at this juncture," said a person familiar with Etihad's
position.Etihad posted a "significant loss" at end of last year that would continue into 2019, according to an internal memo seen by sources
The memo also showed 50 pilots would lose their jobs as airline cut costs.Jet held talks with conglomerate Tata Sons about financial aid
Sources told Reuters that Mr Goyal ended talks because Tata would have wanted him to step down or take a less prominent role.A source close
to Tata on Thursday said there had been no recent engagement with Jet and doing so was "extremely unlikely" because Tata people had "moved
on internally".Tata Sons declined to comment on Friday.RepossessionAfter disorderly collapse of Kingfisher Airlines in 2012, government
modified rules in line with Cape Town convention, an international treaty making it easier for foreign owners to repossess aircraft when
airlines default on payments.Lessors can file a complaint with government which has power to cancel registration of a plane within five
working days and allow lessors to repossess it subject to certain conditions, including unpaid dues on aircraft.Some laws conflict with full
implementation of convention and government in October said it was consulting to revise those laws - a move that could reduce lease rates
Nevertheless, ability to repossess a plane can be a more complicated process in India than in some other countries.On Tuesday, Jet proposed
to creditors that it would catch up with debt payments in arrears as of September, and from April meet debt payments as they come due,
showed a document seen by Reuters.Jet's debt payments will be large over next few years, starting with about Rs 1,700 crore due by
March-end, credit-ratings firm ICRA said in a January 2 research note.
