NEW DELHI: The Central government on Thursday ruled out raising funds for the beleaguered Jet Airways and asserted that its revival was now possible only under Insolvency & Bankruptcy Code (IBC).
"Each airline prepares its business plan on the basis of its own market assessment and liabilities. Mobilizing financial resources and ensuring efficient operations as per business plans are the responsibilities of the airline," Civil Aviation Minister Hardeep Singh Puri informed the Lok Sabha.
"The government has no role in raising funds for Jet Airways (India) Limited, as it is an internal matter of the airline," he added.
In a written reply, the Minister said that the State Bank of India has filed an application under the Insolvency and Bankruptcy Code, 2016, which has been admitted by National Company Law Tribunal (NCLT), Mumbai, to work out a resolution plan under the said code.
"Revival of the airline is now possible only under IBC," he said.
Responding to supplementaries in the lower house on the issue, Puri said that providing facilities to the public was a concern for the government, but it does not make the "business model" for private airline operators.
"They conduct their own business. They have agreements. They take loans. It if not for the government to step in," he said adding that the government had no intention of stepping into private airline operators.
He said Jet Airways reported aggregated losses during the last few quarters which eroded its liquidity and jeopardized its ability to sustain its operations.
"As a result, there were significant overdue towards all creditors including the lessors of the aircraft, pilots, suppliers, oil companies, etc," he said.
To a question whether Etihad Airways has shown interest in the acquisition of Jet Airways, the Minister said in a written reply that based on the business plan prepared by McKinsey, the domestic lenders finalised a Bank Led Resolution Plan in accordance with the Revised Framework of Resolution of Stressed Assets under "Project Shashakt" (Inter-Creditor Agreement arrangement).
"Despite best efforts, the differences between the two partners -- Jet Airways promoters and Etihad Airways -- could not be bridged and eventually, the resolution plan was not accepted by the Board of Etihad Airways," Puri said.
He said the bids were called by the lenders for change in ownership/ management of the company, however, it was understood that some of the relaxations sought by the prospective investors were only available under a Corporate Insolvency Resolution Process (CIRP) under the Insolvency & Bankruptcy Code, 2016 (IBC).