If there is one word to describe Jet Airways, it is this: beleaguered. The former Indian aviation giant is staring down the barrel of yet another major blow that could prevent them from returning to the skies. After collapsing in April, Jet Airways now could be headed towards bankruptcy as creditors seek to recover their dues.
The court case
Flightglobal reported that Jet Airways faces insolvency action from two creditors. Shaman Wheels, a truck dealer, and Gaggar Enterprises, a water bottler, have submitted their matter to the National Company Law Tribunal for hearing on June 13th.
Jet Airways collapse
Jet Airways collapsed in April. This came after months of difficult circumstances and cash crunches. It seemed that, from the start of 2019, Jet Airways hobbled from one day to the next teetering on the edge of insolvency. Finally, after lessors started to repossess aircraft and Jet’s loss of international routes, it was time for them to stay on the ground.
However, while Jet Airways collapsed, unlike Avianca Brazil, Jet Airways didn’t declare bankruptcy. Instead, they suspended operations and the State Bank of India began the process for selling off the airline.
Etihad was a major financial supporter for Jet Airways. Despite facing their own heavy losses, they still injected millions into Jet Airways. When the State Bank of India began soliciting offers for the airline, Etihad was one major party interested in acquiring Jet with the backing of an Indian conglomerate.
On June 13th, the National Company Law Tribunal will hear arguments in Mumbai from Shaman Wheels and Gaggar Enterprises. Jet Airways has not formally declared bankruptcy, as there is still hope for a sale to save the airline.
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Should the creditors receive a favorable ruling, it would be another blow for the carrier. Already, some of Jet’s aircraft were seized in Amsterdam after a Dutch court ordered bankruptcy proceedings against Jet Airways.
Furthermore, Livemint reports that Etihad and a London-based conglomerate are no longer actively pursuing their bids for the collapsed airline. Unfortunately, this makes the situation far more complicated. If the National Company Law Tribunal rules in favor of the creditors, it is very unlikely that any major party would consider investments in the airline.
Jet Airways is going to need nothing short of a miracle if they want to fly again. Unfortunately, it seems that for now at least, they’ll have to wait and see as to how this insolvency case ends.
Should the National Company Law Tribunal declare Jet Airways insolvent? Let us know in the comments!