Late Wednesday evening, the Ministry of Civil Aviation tweeted that "DGCA (Directorate General of Civil Aviation) and other regulators are monitoring the situation carefully to ensure that all existing rules regarding refunds, cancellations, and alternate bookings are followed strictly".
"Our overriding priority remains the safety, convenience, and affordability of our aviation system. We are assisting airlines and airports to bring in capacity rapidly to ensure that fares remain stable and competitive."
The Civil Aviation Secretary will convene a meeting with airports and airlines on Thursday to coordinate and address any emerging issues on capacity, slots and passenger convenience.
On its part, Jet in a regulatory filing said late on Tuesday night that State Bank of India (SBI), on behalf of the consortium of Indian lenders, told the airline that they are 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," the airline said in the filing.
"Consequently, with immediate effect, Jet Airways is compelled to cancel all its international and domestic flights. The last flight will operate today (Wednesday)."
As per the filing, essential services needed to support guest services and the re-commencement of the flight operations will be kept on board until further notice.
"Jet Airways will now await the bid finalisation process by SBI and the consortium of Indian lenders."
In its response to the airline, the lenders said "The Expressions of Interest (EOI) have been received and bid documents have been issued to the eligible recipients today."
"The bid documents, inter alia, have solicited plans for a quick revival of the company. The bid process will conclude on 10th May 2019... We are actively working to try and ensure that the bid process leads to a viable solution for the company."
Informing employees about the decision, the airline CEO Vinay Dube said "Late last night we were informed by SBI, on behalf of the consortium of Indian lenders, that they are unable to consider our request for interim funding of Rs 983 crore."
"However, we must also be realistic that the sales process will take some time and will throw up several more challenges for us, many of which we don't have the answers to, today."
On its part, JetPrivilege, which is a separate, independent entity, part of the Etihad Aviation Group said "We would like to assure our members that the value of their JPMiles are secure and remain intact."
Jet has already folded up most of its operations due to grounding of over 90 per cent of its fleet by lessors.
The cash-starved airline had extended cancellation of international flights till April 18 (Thursday) after last week suspending them till April 15 (Monday).
Jet's woes have intensified as the airline that once operated around 120 aircraft is now left with just a 16-plane fleet. It owes over Rs 8,000 crore to the SBI-led consortium of lenders.
On Tuesday, the airline's scrip on the BSE declined by Rs 19.95, 7.62 per cent, to Rs 241.85 from its previous close of Rs 261.80. The country's stock markets were closed on Wednesday.