For a long time, I have been wondering whether or not the relaunch of Jet Airways will take off. The first time I seriously believed the (re)launch would go through was when the new potential owners of the airline, Jalan Kalrock Consortium, started recruiting people for a launch in 2022. JKC, as they were called for short, had prepared a full team that was essential to launch an airline right from the top management (CEO, CFO, CTO, et al.). The plan was for JKC to work on taking care of the legal issues in bringing the airline home while the management and recruits would all come together towards the other aspects of launching the airline.

However, the whole plan went in vain when, in late 2022, the legal liability of paying the superannuation benefits of various ex-Jet Airways employees was fixed to be also paid by the new owners. They got cold feet because they’d not budgeted for such an expense in their scheme of things; neither was it a part of the resolution plan they’d filed and gotten approved. While they regrouped, the bankers to Jet Airways, known as the Committee of Creditors, got cold feet handing over the entity to them as well. Since then, a terse legal battle has been ongoing, with the lenders and JKC trying to show each other their points of view.

NCLAT sides up with JKC

There was an OK from the NCLAT to hand over the airline to JKC in early 2023. JKC had to comply with a certain set of conditions, which were irresponsibly written. These conditions became the opening the bankers needed to refuse to hand over the entity. For instance, JKC said they’d get the slots back in the Resolution Plan, and the CoC said the slots were not back. In 2019, the DGCA took the slots back and redistributed them to other airlines during the normal course of business.

When Jet Airways prepared to relaunch, it was told to come back in the queue and get the slots like any other airline would. The CoC also ignored that getting so many slots was useless anyway because the airline would restart with single-digit aircraft, not its previous strength. It would take years to bring the plane count back to the previous one, especially in today’s environment, where airlines are looking for every aircraft they can use.

Another source of dispute was the source of funds. And a third one was the way the payment was made. In the initial INR 350 Crores Payment, JKC paid up an amount of INR 200 Crores in cash and asked for one of their earlier bank guarantees to be adjusted for the rest. To this, the CoC did not agree. The whole thing kept bouncing around till JKC took the issue back to the NCLT’s Appellate body, the NCLAT.

On Tuesday, March 12, 2024, JKC got a significant victory at the National Company Law Appellate Tribunal (NCLAT). The NCLAT approved the ownership transfer and ordered it to be executed within 90 days.

The court ordered the monitoring committee, a panel consisting of three lender representatives, three JKC representatives, and an independent chairman, to complete the ownership transfer, which was initially approved in 2021, within three months. The court also ordered the lenders to create security within 30 days on three Dubai properties that the JKC had offered. The lenders must then adjust the guarantee against the INR 150 Crores outstanding. The court also ordered Jet Airways to secure its air operator’s certificate (AOC) within the same time frame.

The State Bank of India and other lenders can appeal the NCLAT decision to the Supreme Court, India’s top court, which has previously shown reluctance to interfere with Jet Airways NCLT and NCLAT rulings. But given the lender’s tendency to challenge every decision in court, I wouldn’t be surprised if they went for another appeal, which could go on for months if not years.

And who knows when JKC will throw the towel and decide to vacate their ownership claim and move along, allowing for a liquidation of the airline. After all, the only people who’ve made money over the years have been the lawyers and the consultants to JKC.

Bottomline

Jet Airways’ potential owner, JKC, got a shot in the arm with the NCLAT, recognising that they are in the right and asking the lenders to comply with the necessary requirements to hand over Jet Airways to JKC within three months. It remains to be seen, though, whether this time the lenders choose to comply with the NCLAT directive or challenge it in the Supreme Court of India.

What do you think will be the next course of action? The launch of Jet Airways, or another legal battle?

---

Liked our articles and our efforts? Please pay an amount you are comfortable with; an amount you believe is the fair price for the content you have consumed. Please enter an amount in the box below and click on the button to pay; you can use Netbanking, Debit/Credit Cards, UPI, QR codes, or any Wallet to pay. Every contribution helps cover the cost of the content generated for your benefit.

(Important: to receive confirmation and details of your transaction, please enter a valid email address in the pop-up form that will appear after you click the ‘Pay Now’ button. For international transactions, use Paypal to process the transaction.)

We are not putting our articles behind any paywall where you are asked to pay before you read an article. We are asking you to pay after you have read the article if you are satisfied with the quality and our efforts.