In a ray of hope for Jet Airways, the National Company Law Tribunal’s (NCLT) Mumbai Bench has approved the resolution plan of Kalrock Capital and UAE-based entrepreneur Murari Lal Jalan for the airline’s revival.
On Tuesday, the bankruptcy court granted 90 days to the consortium to apply for airport slots for Jet Airways. The NCLT court said that the issue of historic slots should be addressed by the Ministry of Civil Aviation and the Directorate General of Civil Aviation.
The government had in its affidavit earlier maintained that Jet Airways can’t claim a right on slots held by it previously.
The bid by the consortium of Kalrock Capital and Murari Lal Jalan was approved by the Committee of Creditors in October last year.
A spokesperson for the Consortium said that it awaits the written order by the National Company Law Tribunal approving the Resolution Plan and shall inform all stakeholders on next steps for the revival of their beloved airline – Jet Airways.
“The Consortium takes this opportunity to thank all the stakeholders who supported the Consortium in this long journey until now and the Consortium seeks their continued support and encouragement on the way forward,” the spokesperson said.
The Consortium maintained its stand that it wants to work alongside the Ministry of Civil Aviation, the Directorate General of Civil Aviation and all its competitors to put Jet Airways back in the skies.
Jet Airways Returns
“The journey until now has been extremely challenging yet satisfying and this would not have been possible without the continued support of the Committee of Creditors of Jet Airways, the Resolution Professional for Jet Airways, all the Advisors and Consultants of the Consortium and the millions of Jet Airways well-wishers and loyal customers across the Globe, who stood by us throughout the process. We are overwhelmed by the support,” a statement read.
The Kalrock Capital-Jalan consortium said that its team will study the written order once issued by the National Company Law Tribunal and will provide a detailed response on the next steps subsequently.
The airline had suspended operations on April 17, 2019 due to financial distress and has been undergoing a resolution process under the Insolvency and Bankruptcy Code (IBC) for two years. It had become a scheduled carrier in 1995.
In October 2020, the Committee of Creditors (CoC) of the grounded airline had approved the resolution plan submitted by a consortium of UK’s Kalrock Capital and UAE-based entrepreneur Murari Lal Jalan.
The airline fell into bankruptcy in 2019 after failing to repay debts. A rescue plan was laid out last year by Dubai-based businessman Murari Lal Jalan and Kalrock Capital Management Ltd., a London-based financial advisory and alternative asset manager.
They pledged in December that Jet Airways would fly again by this summer, operating its historic domestic slots as well restarting international routes. The revival plan included a dedicated freighter service and hubs in smaller cities beyond Delhi, Mumbai and Bengaluru.
The Mint reported that even before COVID-19 crushed demand for air travel, India was a tough place to make money in aviation. Bruising fare wars and high costs made it difficult for many carriers to survive. Kingfisher Airlines Ltd., once the country’s second-largest domestic carrier, collapsed in 2012, and flag carrier Air India Ltd. is saddled with debt and has been searching for a buyer for years.
Jet Airways has almost 21,000 creditors seeking claims of around $6 billion. It has lost most of its landing slots in the time it hasn’t being flying.
Investors remained optimistic about the airline successfully emerging from a restructuring, sending its shares soaring 316% in 2020 despite the industry being plunged into crisis. Jet Airways rose 5% on Tuesday following a similar gain the previous day, trimming its 2021 loss to 18%.
Jet had started as an air taxi operator on May 5, 1993, with a fleet of four leased Boeing 737-300 aircraft. The airline, which got listed on domestic bourses in February 2005, operated its first international flight from Chennai to Colombo in March 2004.