MUMBAI/BENGALURU (Reuters) – Jet Airways shares plunged on Thursday, battered by worries about whether the grounded Indian airline would fly again, while carriers such as SpiceJet rushed in to plug a supply gap in the wake of their rival’s demise.

Once India’s largest private airline, Jet halted all flight operations indefinitely on Wednesday evening after lenders led by the State Bank of India declined to extend more funds to keep the carrier going.

Investors punished Jet shares as trading opened on Thursday, driving them down 34 percent in their biggest intraday fall. The company is worth about $260 million now, versus $1.6 billion at its peak in 2005.

The carrier, saddled with roughly $1.2 billion of bank debt, has been teetering for weeks after failing to receive a stop-gap loan of about $217 million from its lenders, as part of a rescue deal agreed in late March.

While lenders are “reasonably hopeful” a bidding process for an up to 75 percent stake in the airline will end successfully, investors – according to Shukor Yusof, the head of aviation consultancy Endau Analytics – have doubts over whether a successful deal will be completed.

Jet’s “value is dwindling with each passing day”, he said.

However, the crisis at Jet, long the biggest operator in Mumbai, has opened a window of opportunity for other airlines.

“Rivals are looting available slots because of Jet’s shutdown,” Edelweiss Securities analyst Vijayant Gupta said.

Low-cost rival SpiceJet Ltd said it would add 27 planes over the next two weeks, while India’s biggest airline IndiGo has been rapidly inducting new Airbus SE A320neos into its fleet.

SpiceJet shares rose as much as 15 percent to the highest since February 2018 early on Thursday. Shares in IndiGo’s parent InterGlobe Aviation rose 3 percent.

India’s Ministry of Aviation has said that meetings with airports and airlines would be held on Thursday.

“We are assisting airlines and airports to bring in capacity rapidly to ensure that fares remain stable and competitive,” the ministry said on its Twitter account on Wednesday.

A gap in capacity has pushed up fares by 30-40 percent since September in India, ratings agency ICRA has said.

LENDERS “REASONABLY HOPEFUL”

At its peak, Jet operated over 120 planes and well over 600 daily flights. The airline, which has roughly 16,000 employees, has in recent weeks been forced to cancel hundreds of flights and to halt all flights out of India as funds dried up.

“The best way forward for the survival of Jet Airways is to get the binding bids from potential investors who have expressed EOI and have been issued bid documents on 16th April,” Jet’s lenders said, referring to expressions of interest.

They added that they were “reasonably hopeful” the bid process will be successful in determining Jet’s fair value.

CNBC-TV18 reported on Tuesday that Jet’s lenders were set to invite binding bids from four shortlisted suitors that include private equity firms TPG Capital and Indigo Partners, Indian wealth fund National Investment and Infrastructure Fund (NIIF), and Etihad Airways, which already owns a minority stake in Jet.

Etihad did not respond to a request for comment outside usual business hours.

“Ultimately Jet’s share price will hinge on what sort of haircut lenders take. That will dictate the equity value of the company,” Edelweiss’ Gupta said.

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