Following resolution plans for the airline, Jet Airways’ creditors have requested another three-month extension. The airline hopes to receive a resolution plan from the three main bidders with this extension. However, there are some issues holding back a possible deal for the airline.
What’s happening with the sale today?
As things stand today, Jet Airways has three bidders: Far East Development Fund, Prudent ARC, and the Synergy Group. All of them have submitted an Expression of Interest in the airline, but none have submitted a plan to resolve the airline’s debt and revive its operations. Without submitting this plan, the sale process will stall and the airline will be forced to shut down.
Jet Airways has had three rounds of bidding, all of which have generated some interest but no formal plans. The final round ended on March 9th, following which many expected the airline’s creditors to shut down the airline and liquidate its assets. According to Indian bankruptcy law, the airline has 330 days to submit a resolution plan, of which Jet has used 270 days. The 90-day extension will require NCLT’s approval since the law only provides for another 60 days.
Lack of clarity on slots
One of the major hindrances that bidders have pointed out is a lack of clarity on Jet Airways’ remaining slots. This includes the airline’s hundreds of domestic slots and its slots at key hubs such as Amsterdam Schiphol and Hong Kong. The government has currently temporarily leased out Jet’s slots to other carriers, meaning they could hypothetically return to a new owner.
However, the government is yet to offer clarity on the same. On international slots, there is even less clarity. Jet Airways has seen its Heathrow slots returned to Etihad, its Netherlands business sold to KLM, and the government allocate out its other key slots. To add to the woes, the government has refused to clarify the slot issue multiple times. Slots are one of Jet Airways’ most valuable assets, meaning that bidders will be wary without details about them.
The lack of details on slots is disappointing because the bidders have shown interest. The Far East Development Fund discussed possibly introducing the Sukhoi Superjet 100 in India, while asset company Prudent ARC is attempting to raise funds for the bid. In these circumstances, it is highly unlikely any company can place a bid without more information.
Is there any hope for Jet?
The future of Jet has looked bleak since its grounding, but the last few weeks have been particularly rough. With the deadline passed, the CEO of Grand Thornton India, the company tasked with managing the resolution of the airline, tweeted saying the end of the road is near and apologized to Jet Airways staff.
I’m sorry to report but I fear we are very near the end of the road for #JetAirways– the proverbial ‘chicken or egg’ is what killed the airline- my apologies to all the employees in particular that we @GrantThorntonIN couldn’t do better for you. https://t.co/7BNfmQy8Js
— 🇮🇳 Vishesh C Chandiok (@VisheshCC) March 7, 2020Advertisement:
With billions in debt, no clarity on slots, and a government focused on Air India’s bidding process, it seems that the chances of seeing Jet Airways in the sky once again look nearly impossible.