Clipped from: https://www.thehindubusinessline.com/
Jet Airways aircraft. File photo – REUTERS
Jet Airways aircraft. File photo – REUTERS×
It has been over a year since Jet Airways suspended its operations
The deadline to submit a fresh expression of interest (EoI) for Jet Airways ends on Thursday (today). This will be the fourth attempt by Jet Airways’ lenders to resurrect the airline.
In the previous rounds, Prudent ARC, a consortium of Enso Group and Russia-based Far East Development Fund and South American Conglomerate, Synergy group were within the race to bid for the debt-strapped airline but they failed to submit a plan for Jet.
Given that the aviation industry globally is struggling to stay afloat because of the Covid-19 pandemic, the net worth threshold for a potential buyer has been reduced from Rs 1000 crore to Rs 500 crore.
It has been over a year since Jet Airways suspended its operations, but, it’s not over yet for the airline. The lenders had taken 90 more days to find a buyer under the NCLT-led insolvency process before the epidemic broke out on March 15.
Last month, the Insolvency & Bankruptcy Board of India had said that the lockdown period will not be counted in the timeline set to finalise the resolution plans for stressed companies under the insolvency process, providing in a breather for lenders, bidders and resolution professionals.
“Therefore, the revised timeline for completion of the CIRP of Jet is now August 21, 2020, subject to any further extension of the lockdown by the state government of Maharashtra or the central government, as the case may be,” Jet Airways’ resolution professional (RP), Ashish Chhawcharria informed the exchanges earlier this month.
When Jet’s case was accepted by NCLT in June 2019, The tribunal had considered Jet Airways as a ‘going concern’, after which a few of Jet Airways’ assets including its aircraft, engines, and properties were being preserved. Some of those had been leased out to industry players in order to recover some costs.
The financially distressed airline has written a letter to the Ministry of Civil Aviation offering two of its Boing 777 wide-body aircraft for repatriation operations under the Vande Bharat Mission on May 20.
Last month, too, the RP had written a letter to the MOCA seeking permission to use three Boeing 777s passenger aircraft in its fleet for Cargo operations in the wake of the Covid-19 pandemic.
For that to happen, Jet Airways would need to have its AOC reactivated and amended, and it would also require funds.
According to sources, MOCA had responded saying that it will “consider” the request, however, it may be a non-starter as the process might take at least a month. But it looks like MOCA hasn’t considered it.
Over 200 people were being partially paid to preserve these assets. In the midst of taking a few cost-cutting measures, for which the contract of over 30 people working in the Asset Preservation Team was terminated.
Even today, Jet has over 5,000 employees, who’ve been unpaid. In one of the previous meetings, the CoC had voted against giving one month’s salary to Jet Airways’ employees.
On the other hand, Jet Airways’ RP has given a notice to its employees stating, “It has been brought to my attention that certain employees of the Company have taken up employment outside Jet Airways without having followed the proper procedure of resignation and exit formalities (from Jet Airways). Accordingly, I hereby request all such employees to comply with the necessary Company prescribed formalities as below, no later than 15th June 2020.”