Mumbai:Eighteen months after it was grounded, as it ran out of cash and banks refused to give it more money, Jet Airways, once India’s foremost private airline, could take to the skies again. With the airline’s lenders, led by State Bank of India (SBI), approving a plan put forward by a consortium of bidders led by London-based asset management company Kalrock Capital and UAE investor Murari Lal Jalan, the now-defunct airline could be given a second lease of life.
However, there are several hitches on the way. To bring to fruition what some are calling ‘Jet 2.0’, the second innings for the formerly Naresh Goyal-owned airline, the plan has to first pass muster at the National Company Law Tribunal (NCLT). The NCLT will examine whether the plans are in line with the provisions of the Insolvency & Bankruptcy Code (IBC). The consortium will first have to settle all the debt Jet Airways owes its creditors, and will then need to pump in fresh capital to support the airline’s operations. Jet Airways owes Rs 40,259 crore to its creditors as of September this year. As per reports in the media, the company has admitted claims worth Rs 15,525 crore. Financial creditors have claimed Rs 11,345 crore and operational creditors (including workmen and employees) have claimed Rs 27,719 crore. Other lenders have claimed Rs 1,117 crore.
According to media reports, other than the Kalrock-Jalan combine, another consortium that included Abu Dhabi-based Imperial Capital Investments, Haryana’s Flight Simulation Technique Centre and the Big Charter of Mumbai, had also recently launched a bid for the airline, which has been grounded since April 17, 2019 after lenders denied it emergency funds. Naresh Goyal and his wife Anita had stepped down from the Jet Airways board in March, 2019 as part of the bailout plan by the lenders. They had also been deboarded from a Dubai-bound Emirates flight at Mumbai airport on May 25 last year, after the home ministry issued a lookout notice for Goyal, reportedly following a case of diversion of funds filed against him.
Efforts to revive Jet Airways come at a time when the aviation sector is going through its worst phase in recent years. According to a study by Crisil in May this year, the aviation industry will end the current fiscal with a revenue loss of Rs 24,00025,000 crore. Airlines will be the worst-affected, accounting for more than 70 per cent of the losses, or around Rs 17,000 crore, followed by airport operators at Rs 5,000-5,500 crore and airport retailers (including food, beverage and duty-free stores) at Rs 1,700-1,800 crore. ‘That would reverse the trend growth of nearly 11 per cent per annum the industry has logged over the past ten years, making it one of the most adversely affected sectors of the economy,’ it said.
According to Ashish Chhawchharia, partner and head of restructuring at Grant Thornton India, the airline, if it takes off again, will need to become much more efficient. Chhawchharia, who was the resolution professional for the beleaguered airline, said the plan submitted by the consortium would include modernising the airline’s fleet, and bringing in more fuel-efficient planes. The airline’s 12 aircraft need to be restored after maintenance and made operational, which would take another three to four months after NCLT gives its approval for the new plan.
22/10/20 MG Arun/India Today
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