When the consortium of Dubai-based businessman Murari Lal Jalan and UK's Kalrock Capital won the bid in June 2021 to acquire the bankrupt Jet Airways, the hope was that the once storied airline would take off once again soon. Almost two years have passed since and there is yet no sign of that. Instead on Friday, Sanjiv Kapoor, the CEO designate, put in his papers. That will raise fresh question marks on the airline's revival and its future flight path.
Facing financial difficulties, Jet Airways was grounded on April 17, 2019, after over 25 years of service. Two years later on, on June 22, 2021, the Jalan-Kalrock consortium's (JKC) resolution plan for the airline was approved by the National Company Law Tribunal (NCLT). Later in August 2022, Kapoor got all the necessary clearances to become the CEO designate.
Kapoor was an aviation industry veteran having been associated with various airlines, including SpiceJet and Vistara. He resigned as the president of Oberoi Hotels when he was appointed as Jet's CEO designate.
On Friday, he announced his resignation, wishing the team the "very best." It will be effective May 1. The airline's accountable officer and company secretary also recently quit.
"I am a firm believer in the tremendous value that can be created by full-service carriers such as Jet Airways following bankruptcy restructuring, and I know JKC is fully committed towards the revival of Jet Airways and wish them the very best. Consumers in a market as large as India need a choice of full-service carriers and I look forward to seeing Jet Airways back in the skies again soon," said Kapoor in his parting statement.
How soon the airline can fly again though remains a question mark.
There were hopes that Jet Airways would take off in 2022 itself. It received the Air Operators Certificate in May, and made several senior level appointments as a part of the revival plan. The airline was also in talks with plane makers Airbus and Boeing to place orders for new aircraft. However, the year has come and gone, there is no sign of take-off. Differences over certain issues between the new owners and the erstwhile lenders led to the revival plans getting stuck.
At a meeting held in December 2022, JKC had maintained that it had met all the conditions to restart the airline. However, lenders concurred otherwise. There had also reportedly been differences over payment of pending gratuity and provident fund payments of Jet's employees.
JKC approached the NCLT seeking its intervention in implementing the resolution plan. In January 2023, the Mumbai-bench of the NCLT allowed the transfer of ownership of Jet Airways to JKC, stating the consortium had met all the conditions precedent. It gave JKC time till mid-May to settle the remaining dues with lenders. It has to pay Rs 180 crore to the creditors and around Rs 250 crore to former employees.
JKC has reiterated now that it "remains fully committed" to the revival of Jet Airways.
"The revival of Jet Airways is through a court approved process, which has taken more time than originally estimated by us, but needless to say JKC is committed to the revival of Jet Airways. We are in the last leg of closing the transfer of ownership of Jet Airways to JKC, subsequent to which we will settle outstanding amounts payable to previous creditors as per our approved resolution plan and shall, soon thereafter, recommence the commercial operations of Jet Airways as per our re-launch plans," said Ankit Jalan, board member of JKC.
The resignation of Kapoor, will however, cloud things. The executive committee of JKC will oversee CEO designate responsibilities until a suitable replacement is in place, it said.
But, the clock is ticking. May 14, the last date to make the required payments is fast approaching. The airline's Air Operators Permit is also set to expire next month.
The aviation landscape too has changed in the past two years. A new airline Akasa, promoted by the late billionaire investor Rakesh Jhunjhunwala, took to skies and is growing at a fast clip. The government sold Air India to the Tata Group. The Tatas are currently in the midst of consolidating the airline business, which will see Air Asia India and Air India Express being merged into one low-cost entity and Air India and Vistara being merged into one full-service carrier, in which Singapore Airlines will hold 25 per cent stake.
Meanwhile, Jet Airways 2.0 still awaits a take off and there are a lot of headwinds in its flight path.
