A 600-odd-word press statement on Monday from the new investors of beleaguered airline Jet Airways may well rekindle hopes of a brighter tomorrow—of blue skies and tailwinds. Especially for the airline’s employees, many of whom have been out of work since the airline ceased operations in April last year. It’s estimated that around 4,000 employees continue to be on the rolls of the airline, which has found new investors in U.A.E.-based businessman Murari Lal Jalan and asset management firm Kalrock Capital.

“The Jet 2.0 programme is aimed at reviving the past glory of Jet Airways, with a fresh set of processes and systems to ensure greater efficiency and productivity across all routes,” read the investors’ statement, which also emphasised that Jet Airways will remain a full-service carrier. That means the airline would provide free food and beverages to passengers, and offer other perks (such as a loyalty programme) that flyers don’t get in a budget airline.

“If everything goes as per plan and the [investor] consortium receives the NCLT [National Company Law Tribunal] and regulatory approvals on time, Jet Airways would be back in the skies by the summer of 2021,” the release added. In the world of aviation, the summer schedule kicks in towards the end of March 2021. Besides the NCLT nod, regulatory approvals such as obtaining an Air Operator Permit and, crucially, the airline getting back its domestic slots at India’s metro airports puts Jet 2.0 in a “tricky” situation, says an aviation industry insider.

In October, a resolution plan by Murari Lal Jalan and Kalrock Capital—with an investment that’s pegged at ₹2,000 crore in reviving the airline—was approved by the airlines’ creditors. The plan was then put forth to the NCLT for its approval. “The release [from the new investors] seems to be putting some pressure on the resolution professional and the government to sort of work towards some timelines,” says Shriram Subramanian, founder and managing director, InGovern Research Services, a corporate governance advisory firm. “If someone is willing to plonk ₹2,000 crore, you give them the company tomorrow to start operations,” adds Subramanian. “What is the point in waiting? In India, our bureaucracy just drags its feet.” India’s bureaucratic processes is another story, which has been written about ad nauseam.

According to the investors’ release, initial discussions with the Ministry of Civil Aviation (MoCA) and the Directorate General of Civil Aviation over reinstatement of slots and bilateral traffic rights have begun. A majority of the airline’s slots were temporarily handed over by the authorities to other Indian airlines, which operated them till Covid-19 struck. Now with the economy reopening, Indian airlines are operating at 50%-60% of their pre-Covid-19 capacity, even though they are permitted to operate at 80% capacity.

“How the MoCA will facilitate Jet 2.0 to get its slots back is anyone’s guess,” says Vinamra Longani, head of operations for Sarin & Co., an Indian law firm specialising in aircraft leasing and finance. “It’s a situation that one has to wait and watch: would competition be operating all the slots that they got from the Jet Airways portfolio and what will the Covid-19 situation be like?”

But there are some inherent advantages for Jet 2.0 that have been brought about because of the Covid-19 pandemic. For one, as air travel has nosedived across the world there is said to be an oversupply of aircraft in the market. Hence, getting aircraft cheaply won’t be an issue. Moreover, there is also talent readily available in the market at a lower cost, given the large-scale layoffs in the industry. “Many pilots in the Gulf who have been laid off are now back in India,” adds Longani. That said, the question is whether in a post-Covid-19 world there is enough premium traffic for Jet Airways to take off again as a full-service airline?

“I believe there is market for full-service airlines. If [erstwhile] Kingfisher Airlines had continued to just remain a full-service airline and not merged with Air Deccan, it would have been a great success story,” says Harsh Vardhan, founder, Starair Consulting. “By the time they re-enter, the market would be ready to take on new capacities. And when you come with a fresh injection of funds, you have a much higher fighting capacity,” adds Vardhan.

The airline’s new investors said they had evaluated the option of starting a “new airline”, but some of the inherent strengths of Jet Airways—its flight slots, brand value, and reputation for best-in-class in-flight service and safety — “were too tempting to resist”. In India, though, for a full-service airline, deep pockets and committed investors are the need of the hour. For Air India, unfortunately, it is the Indian taxpayers’ money, while for Vistara, it is the mighty Tata group and Singapore Airlines, the flag carrier of Singapore.

“Five years after Vistara having taken to the skies, it’s still losing money and the promoters continue to put in money and expand the airline,” points out Longani. The airline’s pre-tax loss widened to ₹1,814 crore in FY20, against ₹831 crore in FY19 due to higher operating costs. Which makes Longani ask, “Do the the new promoters of Jet Airways have that appetite for loss or put in as much money? And how committed are they?” Says Manoj Narender Madnani, board member of the Jalan-Kalrock investor consortium, “We aim to re-energise the brand by infusing energy, warmth, and vibrancy into it while making it bigger and better.”

Murari Lal Jalan

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