The Supreme Court on Thursday exercised its extraordinary constitutional powers and ordered the liquidation of grounded air carrier Jet Airways' assets. A bench of Chief Justice D Y Chandrachud and Justices J B Pardiwala and Manoj Misra set aside the National Company Law Appellate Tribunal (NCLAT) decision upholding the resolution plan of Jet Airways and approved the transfer of its ownership to Jalan Kalrock Consortium (JKC).
Lenders of bankrupt airline Jet Airways, led by the State Bank of India (SBI), on Thursday told the Supreme Court that successful bidder Jalan Kalrock Consortium (JKC) was "unwilling" to pay the dues and that the "liquidation" was the only option left. The bench led by Chief Justice of India (CJI) DY Chandrachud was hearing the SBI-led consortium plea against the NCLAT's March order upholding ownership transfer of the bankrupt airline to JKC.
More than five years ago on an April evening, cash-starved Jet Airways announced temporary grounding of operations after flying as a full service airline for 25 years. Since then, more than 20,000 jobs and money worth thousands of crores owed to lenders, vendors and passengers evaporated while awaiting an insolvency resolution. And today, the Supreme Court ordered the airline's liquidation, marking the formal completion of a turbulent journey into the sunset and shattering lean revival hopes.
A Jet Airways employees' union has moved court for liquidation amid continued differences between lenders and the Kalrock-Jalan consortium over the revival of the grounded airline. Last month, the consortium had made an application to the National Company Law Tribunal (NCLT) seeking control of the airline. The consortium said it has fulfilled all the conditions according to the plan and said banks should initiate steps to hand the company over to them.
Jet's air operator certificate will lapse on May 19.
Challenging the "illegal" reduction in its claim by the erstwhile resolution professional (RP) in the Jet Airways revival plan, the Punjab National Bank (PNB) has moved the National Company Law Appellate Tribunal (NCLAT) citing discrimination. The NCLAT on Thursday issued notices to RP Ashish Chhawchharia and the committee of creditors on PNB's plea to set aside the insolvency court's approval of the airline's revival plan. It has posted the matter for further hearing on September 21.
The consortium of UAE-based businessman Murari Lal Jalan and London's Kalrock Capital -- which has won the bid to revive Jet Airways -- on Monday said it expects to start operating the airline by the summer of 2021.
'Boeing has returned some cash to the airline which will help it improve the current liquidity crisis.'
Both Jet Airways and Go First have met with a similar fate of landing up in insolvency, albeit for different reasons. Whether Go First will be able to avoid the sharp erosion in value like in the case of Jet, experts say, will depend on how quickly it is able to restart operations and retain its slots at airports. Go First, owned by the Wadia group, filed for voluntary corporate insolvency resolution on May 2 due to inadequate capacity utilisation that led to a cash crunch.
The Supreme Court on Wednesday asked the Jalan-Kalrock consortium, the new owners of cash-strapped Jet Airways, how much have they paid towards dues on account of provident fund and gratuity to the former employees of the troubled airline. The top court made the query while commencing the hearing on a batch of petitions, including the one filed by the Jet Aircraft Maintenance Engineers Welfare Association, against the October 21, 2022 order of the insolvency appellate tribunal NCLAT.
With this, the total number of aircraft taken out of operations due to cash crunch in the airline and its subsequent failure to pay rentals to various lessors has gone up to 21 so far.
"Tata Sons board is meeting tomorrow (Friday) to consider the proposal to bid for Jet Airways," people in the know of the development told PTI.
Jet Airways is seeing a churn in its senior management ahead of its planned take-off this year. Sudhir Gaur, accountable manager and acting chief executive officer, is the latest to quit the company. Finance head M Shivakumar and head of management information system (MIS) Farazad Patrawalla moved out a few weeks earlier. Gaur had been part of the initial team selected by the Kalrock-Jalan consortium, which secured approval from the National Company Law Tribunal (NCLT) last June to revive the airline.
The liquidity crunch in global markets following the crisis in the US sub-prime mortgage business has prompted Jet Airways to postpone its $ 400 million rights issue to finance the airline's aircraft acquisition by two or three months.
The resolution plan has to be put to work this month itself. Jet has a debt of over Rs 8,000 crore and needs to make repayments of up to Rs 1,700 crore by the end of March.
Insolvency appellate tribunal NCLAT on Tuesday upheld the resolution plan of grounded carrier Jet Airways and approved the transfer of its ownership to Jalan Kalrock Consortium. The NCLAT bench has directed the Jet Airways monitoring committee to complete the transfer of ownership within 90 days. Besides, it has also directed the lenders of Jet Airways to adjust the Rs 150 crore paid by the consortium as performance bank guarantee.
Ace Aviation, which has been fighting Jet Airways for the acquisition of three Boeing B777 aircraft, said that it has acquired another aircraft for the conversion slot in early February 2025.
The National Company Law Tribunal (NCLT) on Monday ordered the liquidation of Go First, the budget carrier that stopped flying nearly three years ago after being bogged down by financial woes. In May 2023, the airline filed for a voluntary insolvency resolution process citing financial woes. The tribunal, in a 15-page order, said it is ordering the liquidation of the corporate debtor Go Airlines (India) Ltd.
Jet Airways' cabin crew and ground staff have challenged the Jalan Kalrock consortium's resolution plan, which was approved by the National Company Law Tribunal (NCLT) in June, flagging concerns about pending salaries and retirement benefits. In their petition filed before the National Company Law Appellate Tribunal (NCLAT), the Jet Airways Cabin Crew Association and Bhartiya Kamgar Sena have submitted that dues of all workmen of the airline were not included as part of the Corporate Insolvency Resolution Process (CIRP) cost. In June, NCLT approved Jalan Kalrock Consortium's resolution plan for Jet Airways, which remains grounded for more than two years now.
Jet Airways has been looking at various ways to raise funds amid acute liquidity crunch that has forced it to ground aircraft, cancel flights in large numbers, shutdown stations and delay salary payments to its pilots and engineers along with other senior staff.
The probe agency has found that the company's vast network of sales agents across the globe was not independent of Jet Airways and several of these entities were linked to its founder, Naresh Goyal.
However, while the capacity void in the domestic market has been filled, a vacuum still remains in international connectivity, especially on the India-Europe and onwards route, which was well connected by Jet Airways via the Boeing 777, Airbus A330 aircraft and its hubs in Paris and Amsterdam.
Jet Airways' engineers, pilots and senior management have not been paid for January and February, besides 87.5 per cent of their December salary is also due.
IndiGo is facing acute shortage of commanders amid aggressive expansion of its fleet. The carrier has more than 210 planes in its fleet.
In a series of tweets reacting to banks led by State Bank of India taking over management control of troubled Jet Airways, Mallya said, "...Only wish the same was done for Kingfisher".
DGCA has told the airline that only "air worthy" aircraft, which are completely fit for flying, should be used in operations.
While media reports suggested that Tata-Singapore Airlines is looking at an all-stock merger of Jet, Tatas, in a statement said, discussions to take over Jet Airways have been preliminary and no proposal has been made
An employees' consortium has demanded that the Committee of Creditors should look at providing one month's salary as an interim financial assistance.
Jet said three of its aircraft were temporarily grounded for engine normalisation and are expected to rejoin scheduled operations on February 1.
When it was operational, Jet Airways had over 22,000 employees of them over 16,000 were on the rolls.
Though NCLT has extended window to find a buyer, bankers don't see much hope of a deal.
The company is actively engaged with all its aircraft lessors and regularly providing them with updates on the efforts taken to improve liquidity.
Among executives who have been approached are former president and CEO of IndiGo Aditya Ghosh, Wolfgang Prock Schauer, current president and Chief Operating Officer at IndiGo and Sanjay Kumar, Chief Strategy and Revenue Officer of IndiGo.
The winning bid attracted over 99 per cent votes, with lenders overwhelmingly voting for a revival instead of recovery through liquidation.
The first tranche of $31 million was due on March 11, while the second instalment of $109 million was due on March 28.
Over the past several months, the airline has struggled to pay vendors and staff salaries on time.
Etihad said it would not participate in the rights issue or infuse fresh funds under the current terms and conditions of the resolution plan
The aircraft was called back to the parking bay at the time of taxiing.
Weeks before shutting down operations on April 17, a logistics vendor had taken possession of a Jet aircraft--a Boeing 777--at the Amsterdam airport for non-payment of dues.
The money is expected to be disbursed by the lenders consortium led by SBI after the Jet management submits an operational plan on how it intends to use the money till May 7.
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