A Jet Airways aircraft at New Delhi's Indira Gandhi International Airport. Photo: AFP

Defunct Indian airline Jet Airways is a step closer to getting its air operator certificate to start commercial flights. India’s home ministry has granted a security clearance to Jet Airways and the airline is planning to restart flights in the next few months, the Press Trust of India reported.

The civil aviation ministry recently sent a letter to the airline stating it has been granted security clearance by the home ministry. The letter said it was “directed to refer to your application … to convey security clearance for change in shareholding pattern of the company/firm, for scheduled operator permit, on the basis of security clearance received from the Ministry of Home Affairs,” the news agency added.

Last week the airline conducted a test flight at Hyderabad to prove to aviation regulator the Directorate General of Civil Aviation that the aircraft and its components were operating normally.

After the test flight, airline chief executive officer Sanjeev Kapoor said the airline had been re-born on its birthday – May 5. “This is the first time ever an airline has been revived and flown under its original call sign and name after suspending operations for an extended period. It is truly a historic moment,” he said.

Kapoor urged the employees to “maintain laser-like focus” on getting the air operator certificate. “No room for complacency, we still have a job to do – to get the AOC and then get Jet flying commercially again, operating the safest, classiest, most people-focused and most loved airline in India,” he added.

This development has been keenly watched in aviation circles. Leading airline IndiGo congratulated Jet Airways on its first test flight. IndiGo’s official Twitter handle remarked: “Congratulations Jet Airways! Wishing you all the best as you prepare for this new start.”

Jet Airways now has to conduct proving flights after which the regulator will grant the air operator certificate. Proving flights are similar to commercial flights with directorate officials and airline officials as passengers and cabin crew members on board.

Once a premier full-service airline under Naresh Goyal, Jet Airways operated its last flight on April 17, 2019, after which it was grounded. The airline was crippled by mounting losses and ballooning debt. Shortly before the grounding, Goyal resigned as chairman and later thousands of employees lost their jobs.

After a long-drawn insolvency process, the airline’s Committee of Creditors in October 2020 approved the resolution plan submitted by the Jalan-Kalrock Consortium. Later, in June 2021, the same plan was approved by the National Company Law Tribunal.

The consortium is a joint venture between Murari Lal Jalan, a United Arab Emirates-based entrepreneur, and Kalrock Capital, a UK-based private equity fund.

The airline industry in India faced a major disruption caused by the Covid-19 pandemic. After the government lifted restrictions following a drop in coronavirus cases, people started traveling again and the airlines increased their domestic operations.

The resumption of scheduled international flights from March 27, after a gap of two years, further boosted the airline industry. Numerous international airlines are in the process of resuming flights from India.

However, fuel prices remain a concern. Since January, jet fuel prices have been consecutively hiked nine times. In India, jet fuel prices are revised on the 1st and 16th of every month based on the average international price of benchmark fuel in the preceding fortnight. Global crude prices have remained high ever since the Russia-Ukraine conflict started in February.

On May 1, the jet fuel price in India was hiked by 3.22%, and compared with January 1 it has gone up by about 50%. In the last four months, fuel prices have increased by 42,830 rupees per kiloliter and it now stands at 116,852 rupees per kiloliter. Jet fuel accounts for more than 40% of the operational costs.

Market analysts fear this could undermine the recovery of the civil aviation sector. A prolonged Russia-Ukraine conflict and high global crude prices could halt the recovery of India’s aviation recovery, some analysts suggest.