Process To Constitute New Jet Airways Board Begins, Hunt On For CEO

Jhunjhunwala Board Slot Airways - Jet Airways - Aviatorsbuzz
A file photo of a Jet Airways aircraft and crew. Source: NDTV

News reports have suggested that the Murari Lal Jalan and Kalrock Capital consortium is hunting for a CEO to lead the carrier post its operations start as the process to constitute the new board has been kickstarted.

According to sources quoted by The Hindu Business Line, Mr. Jalan himself, his relative Ankit Jalan and Ankit Khandelwal have been nominated by him. On behalf of Kalrock Capital, Manoj Madnani, board member of Kalrock Capital, has been nominated.

Board Members Clearance

The newspaper reported that multiple security approvals for those to be on the board of an airline is compulsory along with approvals from the Ministry of Civil Aviation and Home Ministry.

Multiple sources confirmed to the newspaper that the security approvals for Murari Lal Jalan, Ankit Jalan and Ankit Khandelwal are in process. However, Manoj Madnani, a board member of Kalrock Capital, has been nominated but his documentation process hasn’t started yet.

The report said that Rajesh Prasad, who was the Chief Strategy Officer at the airline prior to its grounding, too, could make his way to the board. Mr. Prasad has been instrumental in spearheading the multiple processes for Jet Airways since the CIRP process started in June 2019. It isn’t clear whether Mr. Prasad will be on the board only for the transition period or post that, too, however, the approvals for him too have been processed.

RP on Board for Transition

For the transition period, Ashish Chhawcharia, the Resolution Professional appointed for Jet Airways, too, will also be a part of the board. There is no clarity on who could fill the compulsory female board member’s position as yet.

Along with this, the consortium is hunting for a CEO to lead Jet Airways post its operations start. Rumours in the corporate corridors were that an ex-United Airlines CEO and Nikos Kardassis, the erstwhile Chief Executive Officer of Jet Airways in 2013, too, had been approached, however, sources have denied the same.

Sources have said that the process on the approvals for erstwhile slots of Jet Airways too is progressing. The Mumbai Bench of NCLT has given Directorate General of Civil Aviation and Ministry of Civil Aviation to submit their affidavits on the said matter by May 31. The matter will now be heard on the same date.

The Times of India reported that the process of lessors flying out the five Boeing 737 Max that once flew for now-defunct Jet Airways, from India has started. Two companies, GECAS and SMBC, flew out a Max each from Hyderabad and Kochi on May 22.

As part of the simultaneous global grounding, India had barred the B737 Max from flying to/from/over it on March 13, 2019. In all 18 Max — five ex-Jet and 13 of SpiceJet — were India at that time. From late last year aviation regulators of countries like the US, UK and UAE started allowing this plane to fly after Boeing carried out hardware and software modifications.

In April the National Company Law Tribunal was told that the issue of allocation of airport slots to Jet Airways (India) Ltd could be resolved in the coming weeks with counsels for the winning bidders of the airline, the civil aviation ministry and the directorate general of civil aviation, hoping for an amicable resolution of the issue after a series of meetings.

Media reports suggested that the debt-laden Jet Airways (India) Ltd. rescued by the consortium has proposed to invest Rs. 600 crore in the first two years to repay creditors and acquire an 89.79% stake in the carrier.

Debt Resolution Plan

The debt resolution plan submitted by the consortium of London-based asset management firm Kalrock Capital and entrepreneur Murari Lal Jalan proposed to pay off Rs. 1,183 crores over the next five years.

The beleaguered airline will be injected with Rs. 280 crore as an investment within the first 180 days of the approval of the resolution plan by the National Company Law Tribunal (NCLT).

This amount will be used to pay off financial creditors of Rs. 107 crore, corporate insolvency resolution process or CIRP Rs. 43 crore), workmen and employees for Rs. 113 crore, other creditors for Rs. 9 crore, and the balance of Rs. 8 crore will go to the contingency fund.

 

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