Friday, the 19th of May 2023 is an important day for the JKC (Jalan Kalrock Consortium), which is known for the winning bidder for Jet Airways. It is the last day of the air operator’s permit (AOP) issued by the Directorate General of the Civil Aviation and the permit is set to expire. The revival of Jet Airways, which has been stuck in a limbo for nearly four years now, is unlikely to be completed in 2023.
Jet Airways was granted the AOC on May 20, 2022, by the Directorate-General of Civil Aviation, to help it start full scale service which now seems unlikely. Meanwhile, many top notches jumped the sinking boat, Sanjiv Kapoor, chief executive officer-designate; Mark Turner, vice president of in-flight services; Nakul Tuteja, vice president of human resources and administration; HR Jagannath, vice president of engineering; and Ronit Baugh, head of communications, have all quit.
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On top of it Jet Airways does not even have a management system and its to-be owner the JKC, has not yet completed the transfer of ownership, and the lenders have not received any payments yet.
The fate of Jet Airways is set for a burial is clear with the fact that Jet has not placed any request for renewal of AOP, and as per reports any such request is usually done at least a month prior to the expiry date of the license. Lot of factors are considered before an AOP is awarded, starting from financial strength of the airline, management team, aircraft inventory, Maintenance repair and overhaul (MRO), and numbers of pilots.
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Jet Airways was one of the largest airlines in India, with a 21.2 per cent passenger market share in Feb 2016. It operated over 300 flights daily to 74 destinations worldwide. The airlines started flying international in the year 2004. The airlines went public in 2005 and in 2007, when it acquired Air Sahara.
The Naresh Goyal founded Jet Airways, which was considered as the biggest carrier in India, halted all operations on April 17, 2019, citing rising financial liabilities. Soon the airline was taken to bankruptcy proceedings by its lenders.
Both Jet Airways and Go First have met with a similar fate of landing up in insolvency, albeit for different reasons. The Wadia Group-controlled airline has sought protection from the NCLT against its financial creditors and aircraft lessors to buy time for settling the issue of non-supply of engines by Pratt & Whitney. Whether Go First will be able to avoid the erosion in value like in the case of Jet Airways is yet to be seen.
JKC, meanwhile, is struggling in another battle. On May 14, the 180-day period allotted to JKC by the Mumbai bench of the National Company Law Tribunal (NCLT). JKC was supposed to make payment of Rs 180 crore to the financial creditors following which the management control of the airlines was to be transferred to JKC.
Before the end of the tenure, JKC filed a petition with the NCLT against State Bank of India and Punjab National Bank, JC Flowers Asset Reconstruction and Ashish Chhawchharia, the resolution professional, the hearing of the petition is scheduled for June 6.
As per reports, the JKC is yet to make many payments, be it the lenders or the former employees of the airlines who are still waiting for their dues to be cleared, and these payments also include gratuity payments, and other benefits which were allowed the lenders to disallow the process of handing over of the airline’s management control.
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If experts are to believed the only lesson or say moral of the entire story of Jet Airways to Go First Airlines future is that they resolve the insolvency quickly and restart operations and retain its slots at the airports as soon as possible or they might lead the fate as Jet Airways.
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