After a lot of false starts since the closure of Jet Airways in April 2019, it seems the people managing the liquidity process finally are coming around to realising that a sale of parts is better than trying to sell off everything in one place.
In a filing made to the Indian stock exchanges on Friday, January 17, 2020, Jet Airways informed about the impending transaction. As a part of the deal, KLM has agreed to acquire the Dutch assets of Jet Airways. Long-time readers would remember that a Boeing 77W aircraft, tail number VT-JEW, was parked in Amsterdam since April 2019, when it was impounded due to the debts owed to a cargo handler in the Netherlands.
Besides the aircraft, it seems that KLM will also acquire the slots which were granted to Jet Airways in the Netherlands. Jet Airways used to operate four flights a day to Amsterdam, one with a leased slot from KLM and three with their slots.
Here is what the stock exchange filing said,
[Jet Airways] and a Dutch Trustee entered into a conditional sale & purchase agreement with Koninklijke Luchtvaart Maatschappij N.V., on January 13, 2020, for the proposed resolution of business activities of the Company in the Netherlands as approved by the Committee of Creditors. The proposed resolution is subject to the completion of several conditions including statutory and regulatory clearances, both under Indian law and Dutch laws
KLM, which already operates 14 Boeing 77Ws, has not taken a call on the induction of this aircraft that they will receive from Jet Airways. As per Dutch news reports, they might induct the aircraft or sell it after they complete the necessary checks. The Jet Airways aircraft is at least older than KLM’s 77W fleet, which started getting inducted on October 2009.
Jet Airways used to have ten Boeing 77Ws, however four were deregistered and taken away from India as they were under a different arrangement than the current six. I was able to track down one which is still under storage.
The interesting part is that the Netherlands does not have slot trading like the United Kingdom, so this is more of a grey area at the moment which will have to be confirmed by the Airport Coordination Netherlands. I am sure KLM had reasonable certainty before going for this sort of transaction, and three slots at Europe’s busiest airport sure does sound like a good deal.
Indian newspapers are estimating the value of the transaction to be about USD 23 million. USD 13 million will be paid to the US Exim Bank to clear the titles of the rest of the 5 Boeing 77W aircraft which were on financial lease from the Exim Bank and had a residual payment due. Some of these can be seen in a particular lousy state at Mumbai and Delhi Airports. Apart from this, the defunct airline still has 3 Boeing 737 and 3 A330 aircraft, one of which is leased to Air Serbia/Etihad.
While there is still no clarity if the two sets of people bidding for Jet Airways will make the next move and if ever there will be any money on the table for stakeholders, this transaction clears the title on the rest of the Boeing 77W aircraft. Hopefully, some airline or leasing company can purchase these birds now and give some cash to Jet Airways.