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Gupta-wedding airline suspends flights due to financial troubles

Apr 23 2019 15:19
Carin Smith

The Indian airline used by the Gupta family to transport hundreds of guests on a chartered plane from India to a glitzy wedding at Sun City in May 2013 has suspended all its domestic and international flights due to financial troubles.

Late last week Jet Airways announced it had been informed by the State Bank of India on behalf of a consortium of Indian lenders that they were unable to consider its request for critical interim funding.

"Since no emergency funding from the lenders or any other source is forthcoming, the airline will not be able to pay for fuel or other critical services to keep the operations going. Consequently, with immediate effect, Jet Airways is compelled to cancel all its international and domestic flights," the airline said in a statement.

Bloomberg reported on Tuesday that Jet Airways was once India's biggest carrier by market value. The embattled airline is currently waiting to see if potential investors are prepared to pump in money.

In 2013, a Jet Airways plane chartered by the Guptas for wedding guests landed at Waterkloof Air Force Base. The airline was subsequently fined R80 000 by the SA Civil Aviation Authority for landing at a military airbase without permission.

The wedding propelled the Gupta family to prominence, causing a media furor. 

Jet Airways vs SAA

Jet Airways is the same airline that stood to gain from South African Airways giving up its popular route between Johannesburg and Mumbai in 2015.

In their 2017 book Enemy of the People, journalists Adriaan Basson and Pieter du Toit sought to "connect the dots" around the events that led up to SAA abandoning the route.

They describe how former president Jacob Zuma went on a state visit to India in June 2010 with Ajay and Rajesh Gupta, as well as then-Minister of Public Enterprises Barbara Hogan, as part of his delegation.

Shortly before the India trip, Jet Airways had introduced its first direct flight between Mumbai and Johannesburg, despite the route already being covered by SAA successfully. Hogan later told then Public Protector Thuli Madonsela that she found it "peculiar" that the CEO of Jet Airways wanted to meet with her on several occasions during the business trip.

Hogan also said then-SAA board chairperson Cheryl Carolus told her that Jet Airways had been lobbying SAA unsuccessfully to stop flying on the Johannesburg-Mumbai route.

SAA's 'most profitable' route

In their book, Basson and Du Toit refer to former ANC MP Vytjie Mentor claiming in October 2010 that Ajay Gupta asked her to use her "influence" to get SAA to abandon the Johannesburg-Mumbai route, which she declined. The Guptas deny ever meeting Mentor.

According to Mentor, then-SAA CEO Siza Mzimela told her at the time that the Johannesburg-Mumbai route was SAA's main and most profitable route and that it would not make sense to close it.

Hogan, meanwhile, was fired by Zuma as public enterprises minister in October 2010 and replaced with Malusi Gigaba. In November last year, the Zondo Commission on State Capture heard how, shortly after his appointment, Gigaba called a meeting between members of the SAA board and the president of Jet Airways, allegedly instructing them to "find one another".

Breakdown

In May 2012 SAA announced that it would be adding flights to the Johannesburg-Mumbai route due to increased demand.

Basson and Du Toit describe how, five months later, Carolus and seven SAA board members, as well as Mzimela and two general managers, stepped down after a "breakdown" in their relationship with the SA government. Dudu Myeni was appointed chair of SAA in January 2013, and in April of that same year, SAA and Jet Airways announced a code-sharing agreement on certain domestic flights in India and SA.

Early in 2015 SAA announced that, after 20 years, it would stop flying to Mumbai due to "financial losses".

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