NEW DELHI (Reuters) - India’s Jet Airways has been forced to ground more than three quarters of its fleet after failing to pay lessors as it awaits bailout funds promised by state-run banks.

FILE PHOTO: Jet Airways aircrafts are seen parked at the Chhatrapati Shivaji Maharaj International Airport in Mumbai, India, March 26, 2019. REUTERS/Francis Mascarenhas/File Photo

Jet struck a deal to escape bankruptcy earlier this year in which State Bank of India (SBI) and other lenders were to pump $218 million into the firm and temporarily own a majority stake in the airline.

But Jet has not got any of the funds so far and has not paid its employees for March, a person with direct knowledge of the matter said on Wednesday.

Once India’s leading full-service airline, Jet was founded 25 years ago by Naresh Goyal at a time when state-run carrier Air India was the only real formidable opponent. In recent years, however, Jet has struggled to compete with low-cost carriers such as IndiGo and SpiceJet that now dominate Indian skies.

GROUNDED

Jet’s operational fleet stood at 28 aeroplanes as of Wednesday, a company spokesman told Reuters, versus 119 planes last year.

At least 69 aircraft have been grounded due to money owed to lessors, according to stock exchange filings by Jet, while the remainder are out of service for maintenance.

Some lessors with direct knowledge of the matter said Jet had told them it would pay for one month’s rental and maintenance by the end of last week, but no payment had been received.

“We already have five to six months of delinquencies and we were promised just one month and even that hasn’t been paid. This is very disappointing,” said one of the people, who declined to be identified due to the sensitivity of the matter.

Jet did not respond to specific queries on lessor and salary payments but said in a statement that the airline has informed the aviation regulator it is operating a curtailed schedule.

For a graphic on Jet Airways planes hamstrung by lessor defaults, see - tmsnrt.rs/2HWffZk

For an interactive graphic on Jet's fleet grounding, click here tmsnrt.rs/2IdxKb7

In a statement late on Wednesday, former Jet chairman Goyal, who resigned from the airline’s board last month but still holds a 25.5 percent share in the company, said he was cooperating with the Indian lenders and had agreed to their terms in a timely manner.

“I have ... signed on the dotted line as required to ensure release of the much needed funds committed by the lenders, in order to secure a sustainable future for Jet Airways,” Goyal said.

PRECARIOUS SITUATION

The Jet rescue plan itself is also facing difficulties. It was based on a directive issued by the country’s central bank last year but India’s top court quashed that directive on Tuesday.

SBI and Jet did not respond to requests for comment on the court ruling.

Madhukar Ladha, an equity analyst at Mumbai-based firm HDFC Securities, said he did not see Jet’s rescue package being in peril as the deal was already agreed.

After the bailout was announced, Jet told India’s aviation regulator it would not ground any more planes and would fly 40 more aircraft by the end of April, taking its operational fleet to 75 planes.

But late on Tuesday, Jet grounded 15 planes.

With a smaller operating fleet, Jet has given pilots and cabin crew the option of flexible working days and taking extended leave with or without pay, according to a note to staff seen by Reuters.

Even as the aircraft groundings are currently impacting Jet’s operations, the airline needs to rationalize its fleet and focus on profitable routes, said HDFC Securities’ Ladha.

“The situation remains precarious,” he said.