A revival of Jet Airways (India) Ltd is likely to get prolonged as the airline faces fresh litigation, besides challenges in procuring slots at the country’s busiest airports of New Delhi and Mumbai.
While the new promoters of Jet Airways, a consortium comprising UAE-based entrepreneur Murari Lal Jalan and London-based Kalrock Capital, were planning to relaunch the airline by early 2022, Punjab National Bank, which had earlier approved the resolution plan, has thrown a spanner in the works by approaching the National Company Law Appellate Tribunal (NCLAT).
That apart, NCLAT has also agreed to hear claims by two Jet Airways employee unions who have raised concerns over pending dues and retirement benefits under the resolution plan. Jet Airways was grounded in April 2019 following a acute cash crunch and large debt.
“The pending litigation before NCLAT will in all likelihood impact the resurrection of Jet Airways 2.0, as the new owners could shy away from making sizeable investments in the airline amid litigation,” said Vinamra Longani, head of operations, Sarin & Co., a law firm specializing in aircraft leasing and finance. “Besides, it may be a challenge for Jet Airways 2.0 to get meaningful slots which are required to attract high-yielding business traffic at airports in Mumbai and Delhi. A lot would depend on when they apply for the slots. If they delay, and air travel recovers to pre-covid levels, such slots will be difficult to bag,” he added.
Ahead of its grounding, Jet Airways—once India’s largest private airline—operated several prime slots in Mumbai and Delhi. Flights in the early morning and late evening usually offer higher yields as they target business travellers. However, Jet Airways 2.0 may not have this advantage.
{{/usCountry}}Ahead of its grounding, Jet Airways—once India’s largest private airline—operated several prime slots in Mumbai and Delhi. Flights in the early morning and late evening usually offer higher yields as they target business travellers. However, Jet Airways 2.0 may not have this advantage.
{{/usCountry}}If one de-links the airline’s earlier slots and bilaterals, Jet Airways 2.0 is effectively a startup airline, said a former senior executive of a budget airline. “The judgement says slots cannot be attached because Jet stopped operations before it came to NCLT. It’s a botched bankruptcy. You got a bidder after two years. But, you are getting the same outcome proposed by the previous promoter,” the person said, requesting anonymity.