FAQ: When Will Jet Airways Fly Again? Will it Retain Old Routes?
NCLT has approved a resolution plan submitted by the UK-based Kalrock Capital Partners and Murari Lal Jalan.
Two years after mounting debt forced it to suspend operations, Jet Airways may soon take to the skies after the National Company Law Tribunal approved a resolution plan submitted before it by the United Kingdom-based Kalrock Capital Partners and Murari Lal Jalan.
The plan, submitted by the consortium in October 2020, had proposed an investment of Rs 600 crore, which would be paid to Jet’s creditors, in exchange for 90 percent stake in the defunct airline.
The approval comes with a time-period of 90 days, following which the consortium will have to approach NCLT for an extension.
Ashish Chhawchharia, Head of Restructuring Services, Grant Thornton Advisory told NDTV that the airline could start by “the end of this calendar year.”
Who are the investors?
Kalrock Capital - A global financial advisory firm based in London, Kalrock is led by Florian Fritsch, and, has been known for its role of principal investor as well as co-investor in alternative asset classes.
It has dealt in real estate financing, venture capital and special situations over the last 20 years.
With a focus on German-speaking markers in real estate, Kalrock Capital has interests in consumer internet, enterprise technology, e-mobility, etc.
As of December 2019, it’s fixed and current assets stood at £6,525 (British) and £267,206 respectively.
Murari Lal Jalan - A real-estate developer within markets like UAE, Russia, Uzbekistan and India, Jalan was brought in owing to his expertise as an Indian-origin investor with global experience.
Will Jet Airways retain old routes and slots?
With the resolution being approved, the next step for the consortium would be to secure airport slots. In fact, NCLT, in its order, has asked the Centre to ensure that slots allotted to Jet help the consortium in making the resolution process a success.
According to The Times of India, Jet Airways had nearly 700 landing and take-off slots across airports, which were later reassigned to other airlines after Jet suspended operations in April 2019.
While the airline will have to apply for these slots afresh, the Ministry of Civil Aviation had expressed reluctance in returning Jet’s old slot to the entity in March this year.
Who will be the key employees of the airline?
While the consortium has bagged NCLT’s proposal, it still has to put together a team to run the airline. According to a Business Standard report, the management will have to make fresh appointments in key areas like engineering, flight safety, operations and security.
The report says that former head of Operations and Training at Jet Airways, Sudhir Gaur, and a few others, have been listed as possible names to head the new team.
The consortium, says Bloomberg Quint, has already decided on candidates for the airline’s senior leadership, which will be a mix of both Indian and foreign aviation experts.
“There is going to be a high level of corporate governance at the core, which is what we bring as our expertise,” Manoj Narender Madnani, a board member at Kalrock told BQ.
Will old Jet employees be taken back?
Prior to its closure, Jet Airways had around 9,000 employees.
While more than 3,700 were attached to the ground service, about 2,000 were part of the in-flight service, 1500 were associated with the engineering department, 1000 were involved in flight operations and about 500 employees were part of the corporate-commercial department of the airlines.
This number has reduced to 4,000 after jobless employees joined other airlines.
Chhawchharia told NDTV that the new team will grow slowly and that all hirings will not be made at one go.
“As it progresses and inducts more aircrafts, it will need trained manpower, and accordingly, ground staff, pilots and crew will be added. So they will add people as they move forward..... I think there is definitely hope for those who stayed with Jet Airways and kept their faith in it.”Ashish Chhawchharia, Head of Restructuring Services, Grant Thornton Advisory.
What will the new airline focus on?
In order to make good on the investment the consortium will be making in Jet Airways, the new management has decided to focus on the VFR segment – people who travel to visit friends and relatives – along with playing an important role in the global supply chain, Madnani told BQ.
In addition, Kalrock wants Jet to continue as a full-service airline, as opposed to it joining the race for no-frills carriers like Indigo, SpiceJet, GoAir and Air Asia. As of now, only Air India and Vistara are the two Indian carriers offering a full-service experience in the skies.
But recreating Jet Airways will cost the consortium an estimated Rs 10,000 crore over and above its sale price. This expenditure will be incurred towards permits like air operator’s certificate and approvals linked to aircraft maintenance.
Another Rs 15,000 crore will have to be spent towards the working capital that will be required to run the airline.
What happened to Jet?
17 April 2019 - Facing a massive cash crunch, Jet Airways suspends operations.
20 June 2019 - SBI-led group of creditors file insolvency petition before NCLT.
13 March 2020 - In the absence of any bidder, Jet Airways seeks more time from NCLT for the resolution process, which was accepted by NCLT on 18 March 2020.
17 October 2020 - The Committee of Creditors (CoC) approves the resolution plan of the Calrock-Jalan consortium.
22 June 2021- NCLT approves the resolution plan of Kalrock-Jalan Consortium, directs the Ministry of Aviation and DGCA to allot slot.
(With inputs from NDTV, Times of India, Bloomberg Quint, and Business Standard)
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