India’s full-service airline Jet Airways may finally start flying again a few months after being grounded for more than two years.
The winning bidder for the bankrupt airline, Jalan Kalrock Consortium, expects to restart operations in four to six months after it receives approval from the National Company Law Tribunal for its resolution plan.
The consortium, which comprises London’s Kalrock Capital and Gulf-based businessman Murari Lal Jalan, in October 2020 won the bid after the Committee of Creditors of Jet Airways had voted in its favor.
Jet Airways stopped flying on April 17, 2019, over unpaid dues and multiple defaults, and it has been undergoing proceedings under the Insolvency and Bankruptcy Code.
The consortium hoped to restart the airline by April this year, but had to put it off due to unresolved cases. There are nearly 40 pending cases against Jet Airways in the bankruptcy court.
The consortium’s lead member, Murari Lal Jalan, said revival efforts are on track and he expected the tribunal’s approval to come soon, the Press Trust of India reported. This approval is needed to implement the revival plan.
He also expressed optimism about the state of India’s aviation sector, which is now recovering from the impact of the Covid-19 pandemic, and hoped that normalcy would return in six months.
India banned flights on March 25 last year as part of its countrywide lockdown to contain the spread of the coronavirus. A limited number of domestic flights were allowed to resume on May 25, but scheduled international flights continue to remain suspended.
Jalan stated that initially Jet Airways will resume flying with about 25 aircraft, according to the revival plan submitted to the Committee of Creditors. “We will start with passenger services. All options, either it is cargo, or international (services) or anything, are open,” he told the news agency.
The consortium has already held discussions with India’s civil aviation ministry on the issue of airport slots. Jalan said concentrating on proper aircraft and human resources will be the two most important challenges.
The consortium earlier told the lenders’ committee that it will cut down the employee strength to about 300, from 3,300, and a sum of 12 billion rupees (US$165 million) will be set aside to clear employee dues. The airline owes nearly 20 billion rupees ($275 million) in ticket refunds to passengers and the consortium has decided to refund that money with a cap of 15,000 rupees per passenger.
Jet Airways was launched in 1993 by Naresh Goyal in partnership with Abu Dhahi-based Etihad Airways. It soon became a dominant player and ruled the domestic skies for nearly two decades, till its reign was challenged by low-cost peers such as IndiGo and SpiceJet.
Saddled with high debt and mounting losses, the airline defaulted on debt repayments leading to the resolution plan and eventual takeover by a group of banks, comprising the State Bank of India and a host of other private and state-owned entities. Goyal resigned as chairman in March 2019.