Just after the collapse of budget airline WOW Air, Jet Airways also declared bankruptcy and halted operations in April of 2019. Since then, some of its assets have gone to other airlines while some aircraft sit in storage until bankruptcy proceedings are finished. Here’s what is happening with Jet Airways now.
Looking for Synergy
Firstly, there is only one credible party that has shown interest in reviving the airline: South America’s Synergy Group. The Group was created and owned by entrepreneur Germán Efromovich, and already owns two-thirds of Avianca Airlines. However, according to LiveMint, despite putting forward an expression of interest (EoI) in August it has not informed creditors of a plan to revive the airline.
LiveMint goes on to say that the resolution professional (RP) responsible for Jet Airways has yet to hear from Synergy Group:
“There has been no update (from Synergy) since the company’s founder Germán Efromovich visited India a few days ago,” -Anonymous source
Most interestingly, a person close to the matter reports that Efromovich’s team told several Jet employees that it will present a resolution plan to lenders by October 14th, as it needs time to complete due diligence. Efromovich and a team from Synergy Group had traveled to India to tour a Jet hangar and meet with remaining employees.
LiveMint was unable to independently verify this the report of an October 14th resolution plan. However, the Hindu Business Line reports that the shortlisted final bidders have until October 14th to submit their final resolution plan.
According to sources, one of the largest hurdles is finding an Indian partner. Under India’s foreign ownership regulations, only 49% of a company can be owned by a non-Indian entity. There have been no public reports of an Indian partner being found. At the moment, the banks listed below have 51% ownership of what’s left of the airline. These banks are responsible for releasing interim funds to lenders.
While chances for a revival are still up in the air, India’s NCLT – National Company Law Tribunal had asked the lenders of Jet Airways’ to issue “interim lifeline funds to the grounded airline in the next 15 days”. This is according to a Hindu Business Line article written on September 26th. This means just a few more days remain before the NCLT deadline arrives.
Lenders include the following banks:
- Yes Bank
- Punjab National Bank
- IDBI Bank
- Bank of India
- Indian Overseas Bank
- Axis Bank
The (NCLT) had decided to sanction Rs 63 crore ($US8.8 million) to airline Resolution Professional (RP) Ashish Chhauchharia. In fact, as of last week, only the State Bank of India had released its share of Rs 10 crore (US$1.4 million). However, others had yet to disburse the funds.
SpiceJet picking up some pieces
Indian budget airline SpiceJet has been in Jet Airways related news as it has over 30 of the airline’s Boeing 737 Next Generation aircraft. Furthermore, it is eyeing some of Jet Airways 737 MAX orders:
“Lessors are in touch with us for MAX aircraft. There is an opportunity to backfill, to make up for some of the lost time,” -Ajay Singh, SpiceJet Chairman.
According to Business Standard, SpiceJet has also taken some of Jet’s domestic and international airport slots temporarily. However, the airline’s chairman says that, as far as he was concerned, they have now become permanent as per aviation rules.
So it looks like we will have to wait until October 14th for any ‘big’ news regarding the fate of Jet Airways. Until then, lenders will continue with the NCLT process as they try to get back what is owed to them.
Do you think the Synergy Group will be able to pull off this airline relaunch? Let us know by leaving a comment!