Two years after the once-storied Jet Airways went bankrupt, the National Company Law Tribunal (NCLT) on Tuesday gave its nod to the Jalan Kalrock Consortium's bid for the airline and the resolution professional is hopeful that the carrier will be back in the skies by the end of this year.
While the detailed written order is awaited, the tribunal made it clear that it will not give any direction on the issue of airport slots for the airline, saying that the matter will be handled by the government or the appropriate authority concerned.
Financial distress forced Jet Airways, which flew for more than two decades, to suspend operations on April 17, 2019 and a consortium of lenders, led by the State Bank of India (SBI), filed an insolvency petition in June 2019, to recover outstanding dues worth over Rs 8,000 crore.
In an oral order, an NCLT Mumbai bench chaired by Mohammed Ajmal and V Nallasenapathy, approved the resolution plan for Jet Airways that will have to be implemented in 90 days starting from June 22.
It also said that if further extension of the effective date is required, the resolution applicant (Jalan Kalrock Consortium) can approach the tribunal again.
In October 2020, the airline's Committee of Creditors (CoC) approved the resolution plan submitted by the consortium of the UK's Kalrock Capital and the UAE-based entrepreneur Murari Lal Jalan.
Jet Airways has been undergoing a resolution process under the Insolvency and Bankruptcy Code (IBC) for two years.
Ashish Chhawchharia, who has been managing the affairs of Jet Airways as the resolution professional, described the NCLT nod as one of the biggest turnaround events for the beleaguered aviation sector and hoped that the airline will be back in the skies by the end of this year provided everything goes well.
Jet Airways shares jumped nearly 5 per cent to the upper circuit limit of Rs 99.45 on both BSE and NSE.
Shares of the airline have lost more than half of their value since it suspended operations in April 2019.
Jalan Kalrock Consortium said it will decide on the next step after receiving the NCLT's written order.
The consortium said the journey until now has been "extremely challenging yet satisfying" and that it wants to work alongside the civil aviation ministry, the Directorate General of Civil Aviation (DGCA) and all its competitors to put Jet Airways back in the skies.
In February this year, the consortium had said it expects to restart operations of Jet Airways in four to six months after receiving the NCLT approval and that the airline is likely to resume services with roughly 25 planes.
While acknowledging that there are a "few concerns" related to the availability of routes/slots for the airline to fly again, Chhawchharia said none of them is unsurmountable.
"I am confident that the DGCA and ministry of civil aviation (MoCA) will duly take into account all issues and give a fair consideration to the business proposal for Jet's revival."
On a preliminary analysis, Chhawchharia said that apart from airports such as Delhi and Mumbai, it appears that other airports have sufficient slots whereas some are likely to expand their capacity.
Regarding the historicity of slot allocations for Jet Airways, the tribunal on Tuesday said it was not giving a direction and the issue will be handled by the government or the appropriate authority concerned.
Slots will be crucial for the revival of Jet Airways once it restarts operations.
The slots that were with the airline prior to the suspension of operations in April 2019 have been allocated to other carriers.
After the CoC gave its approval to the resolution plan in October 2020, Chhawchharia had approached the NCLT stating that the "slots are a vital part of the plan, and it is important that DGCA and MoCA submit their stance on the same".
However, in a joint affidavit to the tribunal, DGCA and MoCA had submitted that Jet Airways does not qualify for grant of slots on the basis of historic precedence and the allocation will be based on 'Slot Allocation Guidelines'.
"Jet Airways does not qualify for grant of slots on the basis of historic precedence and the submission of the airline's that it is in operation for the last 25 years is not a criteria for claiming historicity and it can't substitute the requirements for claiming historic precedence.
"Thus, the claims are wrong and denied," as per the affidavit that was filed earlier this year.
In July 2019, the resolution professional said that he had received claims worth Rs 24,887 crore, including Rs 8,462 crore by financial creditors, against the company.
|Jet Airways insolvency resolution journey|
A brief timeline of the insolvency resolution process of Jet Airways, which started off as an air tax operator in 1993 and became a scheduled carrier in 1995.
April 17, 2019 -- Cash-starved Jet Airways suspends operations
June 20, 2019 -- National Company Law Tribunal (NCLT) insolvency petition filed by SBI-led lenders' consortium
March 13, 2020 -- Jet Airways seek more time for resolution process from NCLT after failing to attract any bidders
March 18, 2020 -- NCLT allows more time for resolution process
June 14, 2020 -- NCLT allows Jet Airways to sell its premises in Bandra Kurla Complex (BKC), Mumbai to settle claims, clear overseas debt
October 17, 2020 -- Committee of Creditors (CoC) approves Jalan Kalrock Consortium's resolution plan.
The consortium also asks for restoration of slots on the basis of historicity
February 25, 2021 -- NCLT grants more time to aviation regulator DGCA to respond to airline's request for slots
March 9, 2021 -- DGCA and the civil aviation ministry refuses to give any assurances on slots in an affidavit submitted to NCLT
June 3, 2021 -- Ministry tells NCLT that Jet Airways does not qualify for grant of slots on the basis of historic precedence
June 22, 2021 -- National Company Law Tribunal (NCLT) approves Jalan Kalrock Consortium's resolution plan; says slot allocations will be decided by the ministry or appropriate authority.
Photograph: Amit Dave/Reuters