Indications of trouble began last August when the airline failed to report its quarterly earnings or pay its staff, including pilots, on time. It later reported a loss of US$85 million.
Jet Airways’ Naresh Goyal, founder of the troubled Indian carrier, has stepped down as chairman and left the company as part of a rescue plan.
The Mumbai-based carrier, which has debts of more than US$1 billion, said in a statement that its creditors would inject up to US$218 million of “immediate funding support” into the airline.
The move will see Goyal’s 51% stake in the airline reduced to half. The airline would also issue 11.4 million new shares.
Recent financial woes saw the carrier - until recently it was India’s second largest airline - forced to ground three-quarters of its 119-aircraft fleet, AFP reported.
The airline was unable to pay aircraft lessors. Its pilots have also complained of delays in receiving their salaries, while the firm also defaulted on loan payments.
In recent weeks, thousands of customers have been stranded after hundreds of flights were cancelled, in some cases with little or no notice.
Indications of trouble began last August when the airline failed to report its quarterly earnings or pay its staff, including pilots, on time. It later reported a loss of US$85 million.
In February, it secured a US$1.19 billion bailout from lenders, including State Bank of India.
But the airline’s crisis has since worsened, reportedly due to stalling talks between Goyal and the airline's other major stakeholder, Etihad.
The airline was previously bailed out by the Abu Dhabi-based Etihad with a US$600-million capital investment in 2013.
Devesh Agarwal, editor of the Bangalore Aviation website, told AFP, “Ultimately, banks will own the airline and need to find the right leadership immediately and inject funds to contain the crisis."