Jet Airways creditors vote for a new owner of defunct airline

Jet Airways, the Indian carrier which was grounded and subsequently shut down in 2019, might have a new owner soon. As a recap, the airline had been grounded in 2019, with its slots and assets stripped away one by one. The airline, which eventually entered a liquidation process of sorts, was to be sold to the highest bidder for the remaining parts of Jet Airways, which is an AOP license, a few widebody aircraft, some slots and not much else to write home about except huge debts claimed to the tune of INR 40,000 Crores (USD 5. 5 Billion Approximately).

The Committee of Creditors wanted to get back as much money as possible from the airline; however, for a long time, no one submitted a firm financial proposal to take over the airline. Just recently, however, on the fourth attempt, two firm bids came in. One from a conglomerate stitched together by Murarilal Jalan and Kalrock Capital, the other by a conglomerate of Flight Simulation Technique Centre, Mumbai-based Big Charter and Abu Dhabi’s Imperial Capital Investments. While Murari Lal Jain earned his stripes in his family’s paper business, the other bid was led by Capt. Sanjay Mandavia, who is a senior commander on the A330s and has worked with Jet Airways and Kingfisher Airlines in the past, and is planning to launch a regional airline called Flybig shortly.

As per a stock exchange filing made by Jet Airways’ resolution professional on October 17, 2020,

The Resolution Plan submitted by Mr. Murari Lal Jain and Mr. Florian Fritsch has been duly approved by the COC under Section 30(4) as the successful resolution plan.

The resolution professional is in the process of filing an application in accordance with section 30 (6) of the code for approval of the said resolution plan by the Hon’ble NCLT and intimation of the same shall be given to the members as required

From here on, the resolution professional will send the plan to the NCLT who will have to approve the plan before a takeover can happen?

Assuming they get the approval from the NCLT, Moneycontrol reports that only a paltry sum of INR 850 crores (USD 115 million) will be paid back to the creditors, apart from a stake in the airline. Of course, the prospects of reviving an airline during the pandemic where air travel has been one of the worst sufferers are unknown, and it would be brave of the conglomerate to take the next steps in the process. But to comment on the plans of the conglomerate will be unfair till we hear what the plans are going to be in the times ahead.

What do you think are the prospects of Jet Airways coming back strong in the days ahead? Is the pandemic going to be a leveller, or starting from zero now will take them years to catch up? What are the tasks ahead for the Jet Airways new owner?


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Comments

  1. Hope this time jet airways has real owners n not rumour as we have been hearing only rumours. Will they compensate also my kids salary for 1.1/2 yrs n gratuity. After working for 21 yrs naresh goyal escaped with dhelp of our govt. Dey are only bothered abt AIR INDIA.

  2. I worked in Jet Airways from 1998 to 2003. That was the startup phase and also as head of Quality I inducted ATRs into the fleet. I strongly feel that the airline has the potential to comeback provided the new owners are truly focused to bounce back in the current situation.

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