Companies

Two years since it stopped flying, Jet Airways awaits NCLT clearance

Forum Gandhi Mumbai | Updated on April 19, 2021

The airline was grounded on April 17, 2019

"I was hoping not to see the second anniversary of Jet's grounding and instead see them in the skies again. However, under the present circumstances and ongoing impact of Covid-19 since last year, we are making progress in the right direction," says Ashish Chhawcharria, the Resolution Professional looking after the airline's sale under the insolvency process.

April 17 marked the second year since Jet Airways was grounded over multi-crore unpaid dues after 25 years of operations. Six months ago, on October 17, 2020, the Committee of Creditors had voted in favor of the consortium UAE based Kalrock Capital and Entrepreneur Murari Lal Jalan.

The airline had drawn curtains on its operations on April 17, 2019 over unpaid dues to the tune of Rs 8,000 crore. Soon after its grounding, State Bank of India had dragged the airline to the insolvency court.

 

Captain Sangeeta Joshi, an employee of Jet Airways said that on the one hand, it is heartening to see that even after two years of grounding, people miss the ”Joy of Flying” with the “flying sun”. On the other hand, “it’s been over six months, with innumerable court hearings but the sword of ‘slots’ still hangs over our heads.”

In 2019, the Ministry of Civil Aviation had handed over Jet Airway's slots to other airlines “temporarily.” The authorities had “positively” assured that the slots would be returned to Jet if and when there was a firm business proposal.

Chhawcharria says he is "optimistic about the progress” and that he is hopeful that the consortium will be able to get an approval soon from the Ministry.

However, there is no clarity on the slots, and the necessary approvals. In the previous hearings, the counsels representing the Civil Aviation authorities said that the Consortium would have to reapply for all the licenses and slots afresh.

Sources close to the CoC questioned what was in it for the winning consortium to take over such a big debt, if it had to reapply for everything. Another source said: “It was fervently hoped that by the time we came around to this day- the second anniversary, the revival efforts would have borne fruit and the teams would be actively involved in getting the airline to return to the skies.”

Two years on, the employees, lenders, vendors, the resolution professional and the winning consortium are eagerly awaiting the approval from the NCLT of the resolution plan submitted by the winning consortium. Unfortunately, the process is taking longer than expected, and it is hampered by the second wave of the pandemic.

The consortium had plans to restart the airline by April 2021. In the backdrop of the delay in approvals, in a recent interview with BusinessLine, Jalan said that the consortium planned to restart the airline within four-five months of the approvals from the NCLT.

At its peak, Jet Airways had close to 22,000 employees including over 6,000 contract workers. Till date, over 3,000 employees have stuck around.

Speaking about the snail-paced approval process, Captain Bijoy James said: “The NCLT process is far from perfect but we found ourselves a serious buyer. Unfortunately, the process is being stretched without cause. The law protects the slots and the clearance should have come quite some time ago.”

The consortium has proposed over Rs 1000 crore of investment. However, the catch is that like the previous bidders, the Jalan-Kalrock consortium, too, wants the erstwhile premium slots that Jet owned at domestic and international airports.

To iron out these things, the UAE-based bidders had set up camp in the Capital city, Delhi and have had a series of meetings and negotiations with the Civil Aviation authorities to get the approvals at the earliest.

The Mumbai bench of NCLT has scheduled the next hearing on May 3.

Published on April 18, 2021

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