Home/ Companies / News/  DGCA to ask Jet about plan to resume flights

New Delhi: The Directorate General of Civil Aviation (DGCA) is likely to ask Jet Airways (India) Ltd about its flight resumption plans as the private carrier continues to stay grounded nine months after the aviation regulator reissued its flying permit.

“We granted them the Air Operator Certificate (AOC) last year in May and so far, we are not aware whether the airline has made any firm plans for inducting aircraft, which is mandated as per the protocol established in civil aviation requirements. We are seeking clarity from them on their plans for starting flights," a senior DGCA official said requesting anonymity.

Last May, the regulator reissued the AOC of Jet Airways, once India’s top private airline, and it is valid until 19 May.

Under the civil aviation requirements, a scheduled commercial airline operator is required to have a fleet of at least five planes, either by outright purchase or through commercial lease. To facilitate start of operations, an applicant is allowed to commence flight services with just one aircraft and meet the requirement of five planes within a year of obtaining the AOC.

After more than 25 years of operations, full-service airline Jet Airways was grounded on 17 April, 2019 amid a severe cash crunch. The insolvency process began in June 2019 and the NCLT approved a resolution plan submitted by the Jalan-Kalrock Consortium on 22 June, 2021. At the time, Jet faced a standoff between the banks and the Jalan-Kalrock consortium over the airline’s ownership transfer.

The National Company Law Tribunal (NCLT) on 13 January allowed the airline’s transfer of ownership to the consortium. The lenders, however, had sought a stay on the order, which was rejected by NCLT.

The two parties also have differences on the issue of paying pending staff dues. In January, the consortium filed an appeal before the Supreme Court seeking a stay on the NCLAT’s 21 October order directing the consortium to clear unpaid provident fund and gratuity dues of 250 crore to former employees of the airline. The plea was later dismissed by the apex court, which upheld the NCLAT order.

“The lenders have approached the NCLAT against the NCLT order on transfer of ownership to Jalan-Kalrock Consortium as they continue to be of the view that JKC has not met all conditions required for the transfer. That hearing is pending. Simultaneously, there are other legal battles with employees, their unions whenever they submit claims on their dues," another person aware of the development said.

“The matter is complicated and remains to be seen whether the resolution of this issue and acquisition of aircraft for commencing operations can take place by mid-May. They may need to re-apply for AOC if legal battles continue beyond May as well," he added.

The Jalan-Kalrock consortium had proposed a cash infusion of 1,375 crore, including 475 crore for payment to stakeholders. The rest 900 crore was to be infused for capital expenditure and working capital requirements. At 380 crore, the lenders took a steep haircut on their admitted claims of over 7,807.7 crore under the approved resolution plan. “The aircraft deal with the original equipment manufacturers is at its final stages and will be announced after completion of acquisition, which is ongoing. The acquisition is a court approved regulated process and all stakeholders and regulators are updated about the process from time to time," a Jalan-Kalrock consortium spokesperson said in response to queries.

“The resolution plan of Jet Airways as submitted by JKC has been also now been approved by the Supreme Court and the matter has attained finality in terms of pending matters. We are moving closer to the acquisition with our funds ready for infusion and change in control," the spokesperson said.

He also said that the airline was not aware of DGCA seeking status on the issue, and the company has kept the regulator aware of all developments. ‘Jet Airways is scheduled to recommence operations within 60-90 days from the date of completion of acquisition and transfer of control to the JKC,’ the spokesperson added.

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Updated: 01 Mar 2023, 06:23 AM IST
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