Updated: June 23, 2021 7:17:36 am
The National Company Law Tribunal (NCLT) Tuesday approved the resolution plan for Jet Airways submitted by the Kalrock Capital and Murari Lal Jalan consortium.
The NCLT Bench approved the resolution plan on the condition that allocation of slots will be considered as and when these are applied for and historic slots will not be available. The consortium will have 90 days to seek all regulatory permissions and complete formalities for restarting the airline and can seek a further extension if needed. In October 2020, the Committee of Creditors (CoC) of the airline had approved the resolution plan submitted by a consortium of UK’s Kalrock Capital and UAE-based entrepreneur Murari Lal Jalan. The airline suspended operations on April 17, 2019 due to financial distress and has been undergoing a resolution process under the IBC for two years.
The airline fell into bankruptcy in 2019 after failing to repay debts. A rescue plan was laid out last year by Jalan and Kalrock Capital, a London-based financial advisory and alternative asset manager. They pledged in December that Jet would fly again by 2021 summer, operating its historic domestic slots and restarting international routes. The revival plan included a dedicated freighter service and hubs in smaller cities beyond Delhi, Mumbai and Bengaluru.
Jet Airways had almost 21,000 creditors seeking claims of around $6 billion. It has lost most of its landing slots in the time it hasn’t being flying. To begin with, the new investors will have to renegotiate contracts with various vendors including fuel retailers, aircraft lessors, caterers, etc, that will be crucial for flight operations.
When Jet Airways was grounded in 2018, the slots that were under use by the airline were re-allocated to other domestic airlines by the government, given the severe crunch of available slots at key airports like Delhi and Mumbai. While it will be important for Jet to get hold of some prime slots to ensure sustainable operations, it is unlikely that other airlines will let go without a fight, given that they have invested in bringing in additional capacity to get those slots in the first place.
The investors have laid out a plan to resume Jet Airways as a small airline in the beginning, for which they have begun negotiating with aircraft lessors.
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