It is good to see shares of a vanished airline hover almost the Rs 100 mark. This is bizarre.’The previous management ran Jet Airways stranded, much to the dismay of air travelers.

Jet Airways

After years of fruitless searching for a well-heeled savior who could nurse the grounded airline back into the air, help may be on the way, according to industry sources.

India’s Fleet Raised in the Past 9 years, with Investment Totaling More than Rs 70k Cr

Dubai Approaches Al Maktoum Airport Expansion As Travel Surges

Jet Airways could, according to them, bring investments from Moscow-centred investors to revive the beleaguered airline by the end of 2022.

It is well known that several billionaires in Russia are looking at exiting western countries and supporting in friendlier shores.

Prime Minister Narendra Modi and

India qualifies, especially on the understanding of the close relationship that has sprung up between Prime Minister Narendra Modi and President Vladimir Putin, a master-stroke for both authorities.

An industry source following results of the defunct airline informed this journalist that Jet Airways’ new owner, the Jalan Kalrock consortium, could get help from Russia-centred hedge funds who have, according to the insider, been negotiating a long-term deal for nearly a year and a half.

“If this fructifies, then the airline will get the much-needed cash for revival, although till date, the major investment has not occurred.

It could happen this year,” the source further told. It is known that certain competitors may be working hard to scupper the agreement, worried that Jet Airways may regain the luster it had before being run stranded by the previous management, despite ties to an important politician (where the airline’s portfolio was concerned) in the previous government.

Cash is vital for Jet Airways and without a substantial infusion, it is going to be a long haul before the company gets around to operational status.

Jet Airways promoter

Hanging on the company’s head like the proverbial Damocles Sword is a whopping Rs 8,000 crore plus cash retired Jet Airways promoter Naresh Goyal owes Indian banks.

And Goyal must pay the cash, which is overdue. Banks are, however, optimistic that the dues will be withdrawn by the new consortium and of course Jet promoter Goyal, and have kept up their loans by funding the airline to the tune of Rs 10 crore per month.

Interestingly, the Jet Airways share still hovers around Rs 89.65 at the bourse.

“It is very surprising to see shares of a defunct airline hover around the Rs 100 mark. This is bizarre, probably there is optimism that the cash will come. So the deals with the Russian fund managers must happen and not finish up in moisture as other actions had,” the source further told.

Indian government

There are some talks in the corridors of the Ministry of Civil Aviation that the Indian government may not allow Jet to sink.

Also, read

In 2012, Kingfisher Airlines

After the Kingfisher fiasco, this could send out a very wrong signal to domestic and international markets. In 2012, Kingfisher Airlines, founded by liquor baron Vijay Mallya, went bust for want of cash, leaving its lessors and creditors with pending dues.

After Kingfisher went down, India ratified the Cape Town convention, an international treaty making it easier for foreign owners to repossess aircraft when airlines default on payments.

That means Jet’s lessors could choose to reclaim planes in case of default.
Jet Airways has been, expectedly, dragged to the court by its creditors under India’s recent insolvency laws.

But there is expectancy among those eager to revive the airline. The consortium recently said it has plans to put more funds into the airline.

Air operator’s certificate (AOC)

An initial investment of Rs 350 crore has not yet materialized but is expressed to have been put on the fast track. The cash is yet to come. What is important is Jet Airways has yet to get the Air operator’s certificate (AOC).

More importantly, it is yet to formalize the lease agreements for 20 aircraft. The consortium plans to induct 20 aircraft and is in discussion with Boeing and Airbus for orders. But much of it remains on paper as of the present, according to industry authorities.

The National Company Law Tribunal

The National Company Law Tribunal (NCLT) in June 2021 gave a go-ahead to Kalrock Capital and Murari Lal Jalan to revive debt-laden Jet Airways.

Now, the consortium has chosen to pay the staff of the erstwhile airline a sum of Rs 100 crore, which is around 8% of the total Rs 1,254 crore owed to them in payments towards provident fund, leave encashment, bonus, and six months’ salary.

That means if a retired employee of Jet Airways had unpaid dues of Rs 5 lakh, the employee would receive only Rs 40,000. The consortium also spoke out of the 4,000 employees, only 50 will be retained in Jet 2.0. about 3,796 employees did not leave hoping to be included whenever Jet continued processes.

According to the revamp, the rest of the employees will be demerged in a ground-handling subsidiary called “Airjet Ground Services Limited (AGSL)”, which is yet to be created.

It is proposed that 24% shareholding will be with Jet 2.0, and the remaining 76% will be offered to the yet-to-be-formed employees’ trust. However, if the trust negates the offer, Jet will retain 100% ownership and deal with the issue as deemed fit, the conglomerate declared.

Jet Airways, started by Naresh Goyal

Jet Airways, started by Naresh Goyal in 1992, was grounded in 2019 due to an acute cash crunch. All the employees, including those who had been with the airline for more than 25 years, were suddenly jobless.

Jet has admitted claims of Rs 7,460 crore from financial creditors, including State Bank of India (Rs 1,636 crore), Yes Bank (Rs 1,084 crore), Punjab National Bank (Rs 754 crore), and IDBI Bank (Rs 594 crore), among others.

But the consortium has proposed to repay only Rs 1,183 crore to financial creditors and employees over five years. The consortium had to infuse over Rs 600 crore in one year with the first tranche of Rs 350 crore in the first six months. Now, it plans to invest Rs 600 crore in six months. “We may pump in $100-200 million. While this is just an

estimate, it depends on how the market dynamics change because of the Covid-19 pandemic,” Ankit Jalan, nephew of Murari Lal Jalan, the leader of the consortium.

Seventy-something Goyal, who started as an assistant in a travel agency, needs to operate his consummate deal-making skills to put Jet Airways back into the skies.

Jet Airways, still grounded, has delayed pre-delivery payments to both Airbus SE and Boeing Co and is overdue on its repair and maintenance contracts.

“There is an expectation that there will be a rescue but there is no clarity on when. It must happen fast,” told the source.