Friday, July 02, 2021

Jet’s re-entry poised to shake up India’s aviation landscape

Dubai: The impending market re-entry of Jet Airways after a two-year hiatus will be one of the potentially significant developments that could shake up India’s aviation landscape, the Centre for Aviation (Capa) said.

Jet 2.0 will be a very different airline in its second iteration, and it will also confront a vastly changed the Indian airline market. “Consolidation, ownership reshuffles, and market share expansion by some players are all on the cards for the post-pandemic industry landscape,” analysts at Capa said.

Jet Airways, grounded since 2019, took a step closer to revival last week after a bankruptcy court approved the insolvency resolution plan submitted by Kalrock Capital and Dubai-based entrepreneur Murari Lal Jalan.

As per the revival plan, the new owners are working of relaunching the carrier within six months after the National Company Law Tribunal (NCLT) issued the final revival order. According to the court’s revival order, operating slots would be allotted to the airline in accordance to the existing norms, and not on the basis of historic rights.

"The Resolution Plan submitted by consortium of Murari Lal Jalan and Florian Fritsch is hereby approved. It shall become effective from this date and shall form part of this order," the NCLT said, adding that its order would be binding upon all stakeholders, including the central and state governments.

Overall, the consortium hopes to repay Rs11.83 billion to creditors over five years, which would include collections from asset sale proceeds and cash flows.

The consortium has proposed to invest R6.0 billion in the first two years in the grounded airline to repay creditors and acquire an 89.79 per cent stake in the carrier.

The consortium has also proposed to invest Rs4.75 billion in the first two years and Rs1.25 billion by selling existing non-core assets like realty and luxury cars by the end of the first year. It has also proposed to pay Rs1.31 billion, Rs1.93 billion, and Rs2.59 billion at the end of the third, fourth and fifth year, respectively, to financial creditors from the airline’s cash flows.

01/07/21 Issac John/Khaleej Times

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