September 18, 2021

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The World Stock Markets Tips & Targets, News, Views & Updates

Jet to commence operations next March as legal issues continue to plague airline

The new owners of bankrupt carrier Jet Airways have deferred for the fourth time in a year, its planned commencement of operations even as it continues to be trapped in legal wrangles with lenders and employees.

In a press release, they said Jet, India’s oldest surviving private carrier, will start operations between Jan-March of 2022. The owners, the Jalan Kalrock Consortium (JKC), had initially planned for the airline to start operations in the summer of 2021, the schedule for which according to the country’s aviation regulator, starts on the last Sunday of March. In a subsequent interview to ET, one of the owners, Dubai-based businessman Murari Lal Jalan had said it would start in July 2021. Later its court appointed resolution professional reportedly said it would start flying by December 2021.

London’s Kalrock Capital is the other partner in the consortium.

In the statement, JKC called the revival process “on track” and said the revalidation process of its dormant flying permit is on.

“Our plan is to have 50+ aircraft in 3 years and 100+ in 5 years which also fits perfectly well with the short-term and long-term business plan of the consortium,” said Jalan in the statement.

Jet’s acting CEO Sudhir Gaur said it has already appointed 150 employees and is looking to induct more than 1,000 this FY.

The consortium plans for the first flight to operate from New Delhi to Mumbai. It aims to start international operations in July-September. The airline’s corporate office will shift to Gurugram, in the Delhi NCR region.

“The process of reviving the grounded carrier is on track with the existing Air Operator Certificate (AOC) already under process for revalidation. The Consortium is working closely with the relevant authorities and airport coordinators on slot allocation, required airport infrastructure, and night parking,” it said.

Jet stopped operating in April 2019, burdened under piling losses, debt and dues. It was admitted under insolvency proceedings by the National Company Law Tribunal in June 2019. After two years of a rambling insolvency process, the NCLT approved JKC’s resolution plan in June this year.

Jet continues to be stuck in legal issues. Earlier this month, Punjab National Bank (PNB) moved the appellate bankruptcy court, seeking a stay on the approval on its resolution plan,

In its petition to the National Company Law Appellate Tribunal (NCLAT), the state-owned lender claimed that the resolution professional (RP) — the executive appointed to manage the company during the bankruptcy process — arbitrarily cut its claim after approving it.

The NCLAT issued notices to resolution professional Ashish Chhawchharia, the Kalrock-Jalan consortium and the airline’s lenders, and posted the matter for hearing on September 21.

This is the second petition in the appellate tribunal over Jet Airways’ revival plan. Late last month, Jet’s employees challenged the resolution plan on aspects of payment of salary arrears and gratuity.

According to the resolution plan, the potential owners of Jet would give a small fraction of the employees’ claimed dues of Rs 1,200 crore and employ a small chunk from the staff still on the payrolls of the airline. The tribunal had sought response of the Kalrock-Jalan consortium on the employees’ petition.

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