BackJet Airways: NCLT approves Kalrock-Jalan consortium's resolution plan
The airline suspended operations on April 17, 2019 due to financial distressIn June 2019, NCLT admitted the insolvency petition against Jet Airways filed by the lenders' consortium led by the State Bank of India
PremiumThe Mumbai bench of the National Company Law Tribunal (NCLT) on Tuesday approved the resolution plan submitted by the Kalrock Capital and Murari Lal Jalan consortium subject to further approvals, reported news agency PTI.
The airline suspended operations on April 17, 2019 due to financial distress and has been undergoing a resolution process under the Insolvency and Bankruptcy Code (IBC) for two years. It had become a scheduled carrier in 1995.
In October 2020, the Committee of Creditors (CoC) of the grounded airline had approved the resolution plan submitted by a consortium of UK's Kalrock Capital and UAE-based entrepreneur Murari Lal Jalan.
The airline fell into bankruptcy in 2019 after failing to repay debts. A rescue plan was laid out last year by Dubai-based businessman Murari Lal Jalan and Kalrock Capital Management Ltd., a London-based financial advisory and alternative asset manager.
They pledged in December that Jet Airways would fly again by this summer, operating its historic domestic slots as well restarting international routes. The revival plan included a dedicated freighter service and hubs in smaller cities beyond Delhi, Mumbai and Bengaluru.
Even before Covid-19 crushed demand for air travel, India was a tough place to make money in aviation. Bruising fare wars and high costs made it difficult for many carriers to survive. Kingfisher Airlines Ltd., once the country’s second-largest domestic carrier, collapsed in 2012, and flag carrier Air India Ltd. is saddled with debt and has been searching for a buyer for years.
Jet Airways has almost 21,000 creditors seeking claims of around $6 billion. It has lost most of its landing slots in the time it hasn’t being flying.
Investors remained optimistic about the airline successfully emerging from a restructuring, sending its shares soaring 316% in 2020 despite the industry being plunged into crisis. Jet Airways rose 5% on Tuesday following a similar gain the previous day, trimming its 2021 loss to 18%.
Jet had started as an air taxi operator on May 5, 1993, with a fleet of four leased Boeing 737-300 aircraft. The airline, which got listed on domestic bourses in February 2005, operated its first international flight from Chennai to Colombo in March 2004.
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