More than two years after it was grounded, Jet Airways is eyeing a relaunch in early 2022. However, the revival of the airline, which flew for more than two decades, may take longer than expected.
Last week, Punjab National Bank, which had approved the airline's resolution plan in 2020, urged the National Company Law Appellate Tribunal (NCLAT) to quash the rescue plan for the debt-laden Jet Airways, alleging financial irregularities in it.
PNB argued that Ashish Chhawchharia,the court-appointed rescue official of Jet Airways, had initially accepted its claim of nearly Rs 10 billion from airline backers but then reduced it to Rs 2 billion which the lender claimed is 'arbitrary and illegal', according to its tribunal filing seen by Reuters.
Chhawchharia has not issued a statement on the matter so far.
The PNB has sought a stay over the execution of the resolution plan. After hearing PNB's arguments, the NCLAT issued a notice directing the resolution professional of Jet Airways along with other parties, including the Committee of Creditors, to file a reply within two weeks and rejoinder, if by PNB, within one week. The matter will be next heard on September 21.
The NCLAT has also agreed to hear two Jet Airways employee unions — Jet Airways Cabin Crew Association and Bhartiya Kamgar Sena — that raised concerns over pending dues and retirement benefits under the airline's revival plan.
In April 2019, Jet Airways was forced to ground all flights due to piling losses and debt — to the tune of Rs 8,000 crore — as it attempted to compete with low-cost airlines. Since then, the airline has been undergoing a resolution process under the Insolvency and Bankruptcy Code (IBC).
A consortium of UAE-based entrepreneur Murari Lal Jalan and London-based Kalrock Capital agreed to pump in Rs 1,000 crore as working capital and give funds to creditors of defunct Jet Airways after it (the consortium) was selected by a committee of creditors last October with over 99 per cent vote to restart the airline.
In June, the National Company Law Tribunal (NCLT) cleared the Kalrock-Jalan plan to revive Jet Airways. Jalan is a Dubai-based NRI businessman and Kalrock Capital is a financial advisory and asset management company.
The airline promoters are struggling at securing slots at the country’s busiest airports of New Delhi and Mumbai. If things don't work out soon, Jet Airways may end up losing business travellers who bring high revenue.
Meanwhile, shares of the airline have lost more than half of their value since its suspension.