“I would subscribe to the view that it’s an aborted mission,” says Jitender Bhargava, the former executive director of Air India, on the ongoing revival efforts of grounded legacy airline Jet Airways. Even as the National Company Law Tribunal (NCLT) has given its nod to the revival of the airline by the U.K.- based Kalrock Capital and U.A.E.- based entrepreneur Murari Lal Jalan, naysayers and aviation analysts agree that the NCLT ruling can’t be viewed as Jet 2.0 being ready for a second take-off. “It’s probably months before anything happens,” says Harish H.V., managing partner at ECube Investment Advisors, an environmental, social, and governance fund.

However, the NCLT ruling paves the way for the first Indian airline to be resurrected from closure under the new bankruptcy law, after over a dozen airlines have fallen by the wayside since the early 1990s. In June this year, the Mumbai bench of the NCLT approved the ₹1,375-crore revival plan for Jet Airways that was submitted by Kalrock and Jalan, both of whom aren’t known in the aviation industry. The revival plan includes payments of ₹380 crore to financial creditors, ₹52 crore to employees and workmen, and ₹10 crore to operational creditors.

About ₹900 crore would be invested towards capital expenditure and working capital requirements to take forward Jet 2.0, a programme aimed at reviving the past glory of Jet Airways that had an over 30% market share during its heyday. “We don’t know too much about these promoters,” says Harish. “They are also facing challenges of the market itself.”

In April this year, while speaking to Fortune India, Jalan was confident that Jet Airways would resume operations in “six months” as a full-service airline— offering the same experience as it did earlier—despite the strong headwinds in the aviation sector. A research note by CRISIL estimates an accumulative loss of ₹10,000 crore for India’s top three airlines (accounting for 78% of passenger traffic) in FY22, on account of lower domestic air traffic compared with pre-pandemic levels, high fuel prices, and only a gradual recovery in international operations.

“How can Jet [Airways] come back into the market? On the domestic front it is very difficult to even get a toehold considering IndiGo has close to 55% market share,” says Bhargava. “And if they are coming into the market to gradually overtake Air Asia India (about 5% market share) and then SpiceJet (12%), I would rate it as very difficult and [nearly] impossible,” he adds. On the day the NCLT judgment was passed, the airline’s new investors said that they wanted to work with the Ministry of Civil Aviation (MoCA), the Directorate General of Civil Aviation, and the airline’s competitors to get Jet Airways back in the skies. “At some point, we didn’t think that they would reach this level; somehow they have managed to get here,” notes Harish.

Key to the success of Jet 2.0 is the issue of the airline’s erstwhile slots at major metro airports across India which the MoCA has distributed to other domestic airlines. In its ruling, the NCLT hasn’t acknowledged Jet Airways’ slots as an asset, which needs to be restored, because the airline wasn’t operational at the time when its insolvency proceedings had started in June 2019. This then brings us to another point: that of the airline’s approvals. “Because they had ceased operations before the commencement of the insolvency proceedings, their approvals would not be protected from termination and may have also lapsed. So my understanding is that they may have to apply afresh for an Air Operator Permit,” says Vinamra Longani, head of operations for Sarin & Co., an Indian law firm specialising in aircraft leasing and finance. A process that could take “a long time” Longani points out.

As far as the NCLT judgment is concerned, it has ruled on all matters but there could be a whole bunch of aggrieved parties approaching the National Company Law Appellate Tribunal (NCLAT). For any company to be resurrected, everyone takes a big haircut, including financial creditors. In the case of Jet Airways, the financial creditors will be taking a 95% haircut as the JalanKalrock consortium has proposed to pay back ₹385 crore against a total claim of ₹7,807.74 crore.

But it’s the airline’s employees who aren’t happy with their payout of ₹23,000 each. According to claims admitted under the insolvency resolution process, the airline owes each of its employees anywhere between ₹3 lakh and ₹85 lakh. Indications are that the employees are knocking on the doors of the labour ministry, the MoCA, and the NCLAT, which could further delay the airline’s second take-off.

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