Though NCLT has extended window to find a buyer, bankers don’t see much hope of a deal.
In the year since Jet Airways operated its last flight former employees and creditors have continued to wait for the payment of their dues, even as rivals have swooped in and acquired the airline’s aircraft and routes.
The airline operated its last flight between Amritsar-Mumbai on April 17, 2019, as lenders turned down its demand for emergency funding.
The Naresh Goyal-founded airline, among the first private carriers to take to skies in 1993, collapsed under a mountain of debt and a cash crunch.
It has been under insolvency since June last with admitted claims of Rs 16,000 crore.
Now, the coronavirus disease (COVID-19) crisis has dashed any prospects of revival.
Before the nationwide lockdown, the National Company Law Tribunal (NCLT) granted an additional three months to the airline’s resolution professional to find a suitor on the grounds that lenders would get better value for their assets if these were sold via a formal resolution plan, instead of the liquidation route.
Till last month, the Russian Development Fund and Prudent ARC were in the fray to revive the airline, but neither submitted a concrete plan.
“In view of the order passed by the NCLT in a suo moto appeal, the period during which there is a lockdown will be excluded while calculating the period of resolution process,” said Ashish Pyasi, associate partner at Dhir and Dhir Associates.
“By giving extension, the NCLT gave additional life to the process so that viable resolution plan can be explored.
"It is pertinent to note that the nature of assets is such that in liquidation these assets may not fetch the same value and may become obsolete.
"Therefore, for maximisation of asset value it is important that some viable resolution plan is explored,” Pyasi added.
However, bankers believe that given the situation, a revival looks difficult.
“Overall, aviation industry is in crisis and airlines have cash flow problems.
"Expecting a company to submit a revival plan for Jet Airways looks out of question.
"Even realising good value from liquidation would be difficult as globally airlines are grounding planes,” said a bank executive.
Jet Airways has twelve aircraft, including three fully-owned Boeing 737s, six Boeing 777s, and three Airbus A330s, one of which is leased to Air Serbia.
In January, it decided to sell one of its Boeing 777 aircraft to KLM to settle pending aircraft loan and meet insolvency process costs in the Netherlands, but the deal is yet to fructify.
While several pilots, engineers and cabin crew have found jobs at other airlines in India and abroad, about 4,000 employees are still on the rolls of Jet Airways.
“It has been difficult for employees to sustain without regular income.
"Many have sold their ornaments or broken their fixed deposits to run households. Some have even gone to the native places,” said Nidhi Chaphekar, Jet’s cabin manager-turned-motivational speaker.
Chaphekar and a few of her colleagues are still optimistic about Jet’s revival.
“The Jet brand is still alive. The aircraft have been preserved. All we are hoping is that the government supports revival and pays us at least one month’s salary,” she added.
Another staffer, Geetanjalee Parelkar, said she had exhausted her savings and her sister was helping her pay loan instalments.
“In the absence of regular income, I have been forced to put up my house in Mumbai for sale and move to Odisha with my children,” said Parelkar, a Boeing 777 pilot.
As of March, over 20,000 claims had been made totaling around Rs 37,000 crore.
Workmen and employees have claimed more than Rs 1,400 crore and financial creditors have claimed over Rs 11,000 crore from the defunct airline.
Photograph; Vivek Prakash/Reuters