Since the creditors of Jet Airways and the National Company Law Tribunal (NCLT), announced that the airline was going to be handed over to NRI businessman Murari Lal Jalan and Florian Fritsch of London-based Kalrock Capital in October 2020, inertia had set in amongst the prospective new owners, who did not do much to resurrect the airline for most of 2020 and 2021, instead, expecting for the handover of the airport slots and a valid Air Operators Permit as their requirement to restart the airline.
This saw them heading to the NCLT again and again for the extension of the timeline by which they had to start showing activity to roll out the restart plan. There was also contention about who would foot the bill for the restart activities before the transition of Jet Airways to its new ownership was complete.
In the last few days, the new designated owners of Jet Airways, the Jalan Kalrock consortium, made some moves that might see the airline take to the skies in the coming months. The prospective owners had already been quietly assembling a team, staffed largely with ex-Jet Airways employees to be involved in the restart of operations of the airline.
In March 2022, Vipula Gunatilleka, who was the Group Chief Executive Officer of Sri Lankan Airlines, joined the team as Chief Financial Officer for the airline. Vipula has been involved in airline turnarounds before, including that of SriLankan Airlines.
In April 2022, Jet Airways’ new management team also saw Sanjiv Kapoor join them. Kapoor brings with him immense experience and a global aviation perspective, having worked with erstwhile Northwest Airlines in the US, and in the aviation consulting practice of Bain & Co. extensively before taking on management positions in airlines in the South Asian region. Kapoor was the Chief Operating Officer of SpiceJet for two years, during which SpiceJet was also grounded temporarily for ten hours in 2014, due to financial troubles. He then moved on to Vistara, where he was the Chief Strategy and Commercial Officer for the airline for about four years, co-creating the famed Vistara experience that the airline was reputed for.
Jet Airways to take off by October 2022
Jet Airways is currently close to completing the procedure required for being issued an Air Operators Permit (AOP), which is a requirement for any scheduled airline to operate in India. India’s aviation regulator DGCA denied the request of Jet Airways to restore their earlier AOP because the airline had been grounded for over two years, and insisted on a full process as if a new airline is going to be launched. For this process to be completed, certain proving flights still need to be completed, where the company desirous of receiving a license is assessed by the DGCA to be granted a license.
The new Jet Airways team is in the process of leasing Boeing 737 NG aircraft, which will be used to complete the proving flight. The airline intends to (re)launch operations with leased aircraft, while considering a new aircraft order from all the major airframe makers, including Boeing, Airbus and Embraer.
Jet Airways will continue to offer Business Class
Jet Airways, which took many shapes and forms throughout its life, including having a low-cost arm in JetLite and pulling meals during the last days of the airline, except for elites, will come back in a similar form when the new airline version, commonly referred to as Jet 2.0. Sanjiv Kapoor stated that the new airline will be offering a full-service business class cabin upfront and an economy class that can compete at LCC fare levels.
While Kapoor has refused to provide further details at the moment about the product of the airline, he refers to the airline as a digital-age Full-Service Carrier, where the product will evolve in tune with the times. The airline promises to not dilute the brand positioning that Jet Airways had back in the day.
Jet Airways will receive $180 mn in funding
The Jalan-Kalrock consortium proposes to infuse Rs 1,375 crores (about $180 million) into the airline, as per the resolution plan of the airline submitted to the NCLT, on the basis of which they were announced as the winners of the resolution process. Out of this amount, Rs 475 crores will be used to pay off dues to financial creditors and customers (after the 95 percnt haircut) and the rest will be used for the airline’s expenses. The new management of the airline believes that this amount is good enough to restart operations at the airline.
The history of Indian aviation is littered with airlines that have been unable to survive in the difficult operating environment of the country. If Jet Airways takes off again, it will be the first airline to emerge from a court-supervised restructuring and restart operations. Not only will it need the smarts of the management team and the spending power of the new owners, but the love and loyalty of the customers who’ve been waiting for it to get back to the skies.
Another full-service carrier will counterbalance the Tatas, who own significant stakes in both Vistara and Air India now.
And as if on cue, NCLT has given Jet Airways another 60 days extension on the resolution plan. Let us hope, this time they don’t need another extension.
(Ajay Awtaney writes about Indian Aviation on livefromalounge.com and tweets from @LiveFromALounge)
