Indian carrier Jet Airways remains in crisis talks with a consortium of banks, aircraft lessors and stakeholder Etihad Airways.

The carrier defaulted on loan repayments in December, has left staff unpaid for months and has missed payments to aircraft leasing companies.

Media reports in India suggested Etihad had set tough terms for a bail-out, including the exit of founder and majority owner Naresh Goyal and his family.

India’s Economic Times quoted a letter from Etihad chief executive Tony Douglas to the State Bank of India, lead lender in the consortium owed money by Jet Airways, stating: “Without approval [of Goyal’s departure] we are not willing to invest a single penny further.”

However, in a statement, Jet Airways denied “any discussions or disclosures on our part” and insisted: “The resolution plan is under active discussion among the stakeholders and the various options are yet to be crystallised and agreed to.”

On Thursday, the Economic Times reported Goyal himself was ready to put €86 million into the airline on condition he retains a stake of at least 25% in the airline.

In a letter to the State Bank of India, Goyal acknowledged “the significant cash crunch and imminent grounding which the airline is facing”.

It is understood India’s government is reluctant to see Jet Airways grounded in the run up to a general election due in April-May.

Jet operates a fleet of 120 aircraft and flies from European airports including London Heathrow, Amsterdam Schiphol and Paris Charles de Gaulle.

Founder Goyal retains a majority stake, but Abu Dhabi-based Etihad owns 24%.

India’s banks have reportedly refused to extend further credit to the airline without investment from Etihad or from a new investor, but the banks may be moving toward a debt restructuring.

In an earlier statement, Jet Airways said it had “a comprehensive plan that will ensure business sustainability”.

The airline said: “In order to avoid any speculation and rumours, we hereby categorically state that in line with the decisions of the board of directors at their meeting held on 27 August, 2018, the company has been working on various cost cutting measures, debt reduction and funding options including infusion of capital, monetisation of assets including the Company’s stake in its loyalty programme, in consultation with various key stakeholders.”