India's second-largest airline is shutting down after running out of money

Punit Paranjpe / Reuters

• Jet Airways is shutting down operations on Wednesday, the embattled Indian airline confirmed. 
• Jet is the second-largest carrier in the country by passengers served, and has been racking up debt for months. 
• The company said it could not pay for fuel or other critical services and that the last flight will land Wednesday. 

Embattled Indian airline Jet Airways will temporarily shut down on Wednesday, the company said, confirming prior reports from Reuters. 

The second-largest airline in India has about $1.2 billion in debt and has been working for weeks to secure another loan to continue operations. However, those discussions fell through, Reuters reported, when state-run banks rejected Jet's $58 million request.

"Bankers did not want to go for a piecemeal approach which would keep the carrier flying for a few days and then again risk having Jet come back for more interim funding," a bank source told the wire service.

In a statement, Jet Airways confirmed that all flight operations are fully suspended and its funding has run out.

"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," it said in a press release. "Consequently, with immediate effect, Jet Airways is compelled to cancel all its international and domestic flights. The last flight will operate today."

Jet operated both domestic and international service from India, including to London, Brussels, Amsterdam and Shanghai. In 2018, Jet had about a 13.8% market share, according to Indian government statistics, making it second in terms of traffic to Indigo.

Shares of Jet Airways on India's national stock exchange fell about 8% in trading Wednesday.