India’s Jet Airways continues to seek fresh capital to secure its future after the carrier defaulted on a debt payment.

On Jan. 1, the company informed the National Stock Exchange of India that the payment of “interest and principal installment … to the consortium of Indian Banks (led by State Bank of India) on [Dec. 31] has been delayed due to temporary cashflow mismatch.” Jet said it has “engaged with” the lenders in relation to the default.

In a subsequent stock exchange filing on Jan. 2, Jet said its long- and short-term credit rating had been downgraded by major ratings agency ICRA Ltd. Jet said the downgrade took into account the Dec. 31 delay in debt installment payment. As well as the cashflow problem, the company highlighted “delays in the implementation of proposed liquidity initiatives by the company.”

Jet Airways announced the outline of a recovery and cost-cutting strategy on Aug. 27, 2018, aimed at reversing steep losses. The recovery plan included pursuing the sale of a stake in its JetPrivilege loyalty program and seeking additional capital infusions. Potential sources for new capital could be strategic partner and stakeholder Etihad Airways, or Indian conglomerate Tata Group. However, no such move has yet emerged.

Jet has been hit by the same forces affecting others in the Indian airline industry. Capacity is soaring, and intense competition is putting pressure on fares. Higher fuel costs and the depreciation of the Indian rupee have also been factors.

In November 2018, Jet reported a net loss of INR12.61 billion ($180.6 million) for the three months through Sept. 30, 2018.

Adrian Schofield,