Can’t have auto-restoration of slots to Jet Airways: Centre tells NCLT | Business Standard News

Clipped from: https://www.business-standard.com/article/companies/can-t-have-auto-restoration-of-slots-to-jet-airways-centre-tells-nclt-121060301091_1.html

The Kalrock – Jalan consortium, who are successful resolution applicants of Jet Airways, said they were under the impression that slots and traffic rights held by Jet will revert to it

Photo: Bloomberg

The Ministry of Civil Aviation (MoCA) in its additional affidavit to the National Company of Law Tribunal (NCLT) has reiterated its stance on the issue of slots saying the resolution applicant cannot claim historicity on slots that were allocated to them earlier.

“….there can’t be any automatic revival of approvals granted to Jet airways and reinstatement of slots, which were with Jet airways and the same would be as per the extant guidelines and regulations”, said MoCA and Directorate General of Civil Aviation (DGCA) said in its affidavit.

When Jet Airways shut operations, the slots which were allocated to it were temporarily distributed among various airlines. And, the airlines that were called upon to immediately create infrastructure so that the public at large does not face any hardship have invested huge amounts of money to created infrastructure to utilise such slots.

“In view of this, though the allocation of slots to such airlines is temporary the same can’t be withdrawn from them without any legitimate basis.”, the affidavit said.

“However, as and when the Jet Airways applies for slots then the slots would be allocated among all the airlines without any claim of historicity in favour of any airline over these slots and such allocation of slots would be as per the Slot Allocation Guidelines, 2013”, the affidavit said.

The matter will be heard on Friday.

In their affidavit, the Kalrock – Jalan consortium, who are successful resolution applicants of Jet Airways, said they were under the impression that slots and traffic rights held by Jet will revert to it. The affidavit further said that the resolution professional and the applicant repeatedly communicated with MoCA and DGCA to reclaim all the slots and the traffic rights held by Jet and despite the fact that there was a moratorium, the authorities reallocated slots and traffic rights to other airlines.

Also, they alleged that the authorities did not, at any point in time, inform the resolution professional that historic rights would not be available to the corporate debtor or that slots and traffic rights allocated on adhoc basis to other airlines would create historic rights in favour such other airlines.

MoCA and DGCA, on the other hand, have said slots can’t be owned by any single entity. Slot allocation is done by the respective airport operators, depending upon the availability of all elements — runway capacity, terminal capacity, parking stand capacity, and other related infrastructure at an airport, including air navigation services — and as per the extant guidelines for slot allocation. Accordingly, the corporate debtor or resolution applicant can’t claim the slots as a matter of right under the present insolvency proceedings.

Jet Airways shut down in April 2019, following a cash crunch. The airline’s slots and traffic rights were then allocated to other airlines, enabling them to fill the capacity vacuum and launch new services.

Further in their affidavit MoCA and DGCA have said, the resolution applicant cannot claim historicity on the slots which were allotted to them for winter 2018 and summer 2019 season, as they failed to utilise 80 per cent of the slots allotted to them and stopped their operation even before the commencement of insolvency proceedings. Thus on the date of imposition of moratorium, neither they had any slots nor they had the right to claim historicity on the slots allotted to them in winter 2018 and summer 2019 season.

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