The Jalan-Kalrock Consortium (JKC) has announced its commitment to restarting Jet Airways and is searching for a new CEO to replace Sanjiv Kapoor, whose term ended on Friday. However, industry experts believe reviving the airline will not be easy, even if the consortium quickly secures control due to changed market conditions and consolidation in the domestic market.
Aviation consultant Vishok Mansingh stated that Jet Airways lost the opportunity to re-establish itself in the market as there was space for a second full-service airline after Air India, which Akasa Air has now taken. He also pointed out that Go First faces engine issues, while SpiceJet has financial challenges, limiting its expansion. Moreover, getting desired airport slots and the right workforce will now be challenging for Jet Airways.
An aviation expert agreed and noted that a lot has changed in the past six to nine months regarding aircraft availability, airport slots, and pilots. He explained that the situation differed last May when Jet’s air operator certificate was revalidated. New aircraft built initially for Russian airlines were widely available in the market for lease at that time, rather than now, due to US and European sanctions.
The consortium had signed letters of intent with lessors for a few Airbus planes built for Russian airlines, but due to their launch delay, the aircraft has been snapped up by others. JKC had planned to have six planes by December 2022 and double the number over the next six months, but the delays have affected their plans.
Hopes for a quick revival have thinned as lenders and the consortium differed on the issue of control and fulfillment of conditions precedent. Last November, the consortium was forced to put employees on leave without pay, and many of them have now quit due to question marks over revival. Jet Airways is now without heads of operations, safety, and training, and the Directorate General of Civil Aviation mandates that all airlines keep their operator certificate valid.
Jet’s air operator certificate will lapse on May 19, and there are other challenges too. The National Company Law Tribunal (NCLT) gave JKC 180 days from November 16 to pay its creditors while allowing them to take control. This deadline is fast approaching, and JKC is expected to seek additional time for compliance, given the lenders’ appeal against the NCLT order.
According to the original resolution plan, JKC has to pay around INR 185 crore to lenders in the 180-day period that ends next month. The grounded airline’s employees are also litigating for priority in payments due to them, including provident funds and gratuity. An application for liquidation of the company filed by the cabin crew union is also pending.
JKC board member Ankit Jalan stated, “Our focus is on the pursuit of justice. Payments to staff must be made on a priority. We are in the last leg of closing the transfer of ownership of Jet Airways to JKC, after which we will settle outstanding amounts payable to previous creditors according to our approved resolution plan and shall, soon after that, recommence commercial operations of Jet Airways as per our relaunch plans.”
