The Jalan Kalrock consortium (JKC) has sufficient funds to revive Jet Airways and pay all its creditors as per the resolution plan, JKC has said.
The airline’s employees, however, are taking the consortium’s claims with a pinch of salt, given ongoing disputes and delays.
“There are cost overruns and there have been delays but that doesn’t mean the resolution plan is not commercially viable. We have sufficient funds to meet our liabilities provided under the resolution plan,” a JKC spokesperson told businessline.
This is the consortium’s first official statement after lenders urged the Supreme Court to wind up the company as the approved resolution plan was unviable. JKC will submit its case before the Supreme Court next month.
Lenders selected the consortium to revive the grounded airline in October 2020 with over 99 per cent vote. The consortium promised to infuse ₹1,375 crore in the airline and its plan and the National Company Law Tribunal approved its plan in June 2021. However, two years later, the plan remains stuck with mounting costs and fading hopes.
Earlier this month, additional solicitor general N Venkataraman informed the Supreme Court that ₹400 crore has been spent on insolvency resolution. Still, the consortium has yet to pay a single penny to its creditors.
“ We will invest when the company is legally ready to issue shares to us. We hope the plan implementation process moves smoothly and in a time bound manner, “ JKC said.
On Thursday, Jet Airways announced the appointment of Sundaram Ramesh, Rajesh Prasad and Gautam Acharya as company directors. The grounded airline has been functioning without the board of directors violating SEBI regulations.
While actions are being taken to ensure compliance, a lot of ground would need to be covered if the airline were to take off again. “There is no mutual trust between lenders and consortium and that is detrimental to the plan,” said a person aware of the matter. “What should have been a relay race with all stakeholders working in unison has turned into a hurdle race,” said another person.
- Read: DGCA stalls Jet Airways’ AOC approval, demands Jalan Kalrock Consortium to resolve lender issues
Jet Airways’ air operator certificate (AOC) lapsed in May, it has no operational aircraft and required a number of mandatory postholders in place. Additionally, there are employee appeals on issues related to provident fund (PF) and gratuity payments. One of the unions has moved NCLT to seek restraint on the sale of assets until payments are made to staff. A union application for the liquidation of the company is already pending.
Yet despite the challenges, JKC says it is confident of revival.
“We believe that resolution plan is still very much viable and we are committed to it. We can once again a form a team to launch an airline. The situation has changed compared to 2020 (when the plan was approved) which has increased our costs. But our revenue potential has increased too. Air traffic has fully recovered and ticket prices have increased,” JKC has said.
Employees, however, remain sceptical.
“We feel JKC has no real intent to revive Jet Airways or pay employee dues. Last October National Company Law Appellate Tribunal ordered the consortium to pay employees gratuity and PF dues. The same was confirmed by Supreme Court, which dismissed JKC’s plea. Now the consortium is seeking 3-5 years to pay the gratuity amount. What guarantees that they will pay the money and won’t vanish?
The way they are handling the process, we doubt they will be able to run the show for 5 years,” said a member of Jet Airways Maintenance Engineers Welfare Association.
“We welcome consortium’s assurance to breathe new life into the airline. However, substantial efforts will be required to return the airline to the skies. Urgent renewal of the AOC and stitching together of a senior management team are essential to execute their ambitious plans. The environment presents additional hurdles with aircraft availability, higher lease rents and the struggle to immediately attract talent,” said Dr Narayan Hariharan, legal advisor to All India Jet Airways Officers and Staff Association.