Jet Airways is finally going to come back again after it was shut down for eighteen months. Today i.e. October 17, 2020, the lenders of Jet Airways Limited approved the resolution plan submitted by UK-based Kalrock Capital and UAE-based Murari Lal Jahan. Both of them are going to be the new owners of Jet Airways who will give a second life to this company.
The resolution plan of consortium Karlock Capital and Murari Lal Jahan has been approved by the majority of e-voting polled by the Committee of Creditors (CoC) under section 30(4) on Saturday. However, it is not confirmed yet how many votes the combine got from lenders, but to go past the finish line at least 66 percent of votes were required.
After the approval of various lenders of Jet Airways, this resolution plan of consortium Karlock Capital and Murari Lal Jahan will now have to get the approval of National Company Law Tribunal (NCLT). After the approval of NCLT, this plan has to get the final approval of civil aviation ministry and corporate affairs ministry. The deadline of this insolvency process is October 21, 2020.
Jet Airways had earlier received bids from two consortiums-Kalorck Capital founded by Florian Fritsch, UK based entrepreneur and Murari Lal Jahan, UAE based entrepreneur. The others were Haryana based Flight Simulation Technique Centre, Mumbai based Big charter and Abu Dhabi’s Imperial Capital Investments LLC.
Jet Airways, once India’s biggest private airline, operated its last flight between Amritsar-Mumbai on 17th April 2019. Since June, it was admitted under Insolvency and Bankruptcy code (IBC) due to acute funds crunch of around ₹10,000 crore under the ownership of its founder Naresh Goyal. Its slots at major airways and traffic rights were awarded temporarily to other airlines. Senior ministry official said “Slots and rights will go back to pool and reallocated according to size and demand of airline. There are no problems of slots.”
The new owners really have to make a significant investment. The overall claims have ballooned over ₹ 40,000 crore which are made by financial creditors, operational creditors and employees. Out of this heavy amount, the resolution professional claimed ₹ 15,525 crore. Financial creditors as State Bank of India, Yes Bank and others have claimed ₹ 11, 344 crores, but they received only 7,459.80 crore.
The revival of Jet Airways is going to happen at that time when several airlines across the aviation sector have filed bankruptcy due to the sudden outbreak of COVID 19. It has also provided new opportunities for new investors to grab the market share in premium traffic and a new airline would be able to negotiate better rates with aircraft manufacturers and suppliers.
Now, everyone’s eyes are on Kalrock-Jalan combine because reviving Jet Airways may be very challenging. The new owners of Jet Airways will have to face a lot of problems as massive debts, dues to employees, airports, ground handlers, activation of dormant, renewal of licenses of pilots and engineers etc. And, they will have to make a lot of affords to kick start the airline and re-establish its popularity again.