New Delhi: The Centre has requested state-owned banks to save Jet Airways by preventing it from bankruptcy. This development comes as the Modi administration looks to do away with thousands of job losses weeks ahead of the General Election, sources reportedly said. Over the last year, the finance ministry has required regular updates from the State Bank of India-led lenders on the carrier's financial status, the sources said.

"Top officials at the finance ministry seek regular updates on the issue,"

In recent months, the banks have provided weekly updates about a revival plan and also sought government advice, highly placed source with the government lenders added.

"Top officials at the finance ministry seek regular updates on the issue," an official at one of Jet's lenders said reads Reuters report.

Rare move by the Government

The government has asked public sector lenders to transform debt into equity and take a stake in Jet in a rare move in the country to use taxpayer money to save a struggling private firm from bankruptcy. A consortium of government lenders could own as much as one-third stake of Jet Airways if the deal is struck.

Jet has been dealing with facing the worst financial crisis in its 25-year-old existence. The carrier has grounded most of its planes, defaulted on loan repayments, delayed salaries and delayed payments to most vendors including aircraft leasing companies.

If Jet is not saved, the airfares may go up

The Centre has also nudged its 49 percent-owned National Investment and Infrastructure Fund (NIIF) – created to make investments in new and stalled infrastructure projects to purchase a stake in the cash-strapped carrier, another source said.

If Jet is unable to be saved, it could drive up airfare in a fast-growing market, an official said.

Story Credit: Reuters