Jet Airways, once a prominent player in the Indian aviation industry, is mired in prolonged uncertainty as its revival efforts face mounting obstacles. The airline’s air operator’s permit (AOP) or air operator’s certificate (AOC) is on the verge of expiration on May 19, dimming hopes of a successful turnaround this year, according to sources familiar with the matter.
Jet Airways has encountered significant setbacks despite securing the AOC on May 20, 2022, courtesy of the Directorate-General of Civil Aviation, with ambitious plans to resume full-scale operations by October. The departure of key members of the management team, including CEO-designate Sanjiv Kapoor, Vice President of In-Flight Services Mark Turner, Vice President of Human Resources and Administration Nakul Tuteja, Vice President of Engineering HR Jagannath, and Head of Communications Ronit Baugh, has left a leadership void within the organization.
Further complicating matters, the Jalan Kalrock Consortium (JKC), the prospective owners of Jet Airways, has yet to finalize the transfer of ownership or fulfil its financial obligations to lenders. JKC emerged as the successful bidder for the beleaguered airline in October 2020.
Once a major force in the Indian aviation landscape, Jet Airways has grappled with a string of financial challenges, including mounting losses, grounded aircraft due to unpaid lease rates, and an unfavourable financial outlook. These factors have severely hindered the airline’s prospects for a swift recovery.
Despite assertions from Ankit Jalan, a board member of JKC, regarding JKC’s commitment to revitalizing Jet Airways, the revival process has proved far more protracted than anticipated. The consortium has encountered obstacles related to aircraft delivery schedules, intensifying competition within the industry, and the search for a capable management team. Consequently, a reassessment of the revival strategy is currently underway.
In a recent statement to the National Company Law Tribunal (NCLT), JKC requested a 148-day extension beyond May 15 to meet its payment obligations, attributing the delay to the banks’ tardiness in initiating the resolution process. This extension implies that the earliest repayment to creditors is now anticipated in November.
Insiders from the industry suggest that JKC is unlikely to make substantial investments in Jet Airways until its outstanding debts are settled, further clouding the prospects of the airline’s imminent resumption of operations. Recruiting a new CEO has reportedly hit a standstill, and negotiations with domestic airports regarding slots and timings have yet to commence.
Jet Airways faces many challenges, with vendors demanding payment for services rendered and the airline’s recruitment efforts being halted. The resolution plan put forth by JKC involved a cash infusion of INR 1,375 crore, including provisions for stakeholder payments, capital expenditure, and working capital requirements. However, the plan’s intricacies, along with protracted resolution proceedings and financial hurdles, have significantly impeded progress towards Jet Airways’ revival.
As the deadline for the air operator’s permit looms, and operational and financial hurdles persist, Jet Airways’s future remains uncertain. The likelihood of the airline returning to the skies in 2023 appears increasingly remote, further prolonging the wait for its revival.