Jet Airways Closer to Flying Again as Rescue Plan Approved

A rescue plan for the airline by Dubai-based businessman Murari Lal Jalan and Kalrock Capital has been approved.

An Indian bankruptcy court ruled Jet Airways India Ltd. can resume operations under a new owner more than two years after it collapsed, according to Ashish Chhawchharia, the court-appointed professional running the carrier’s insolvency.

Jet Airways, once India’s biggest private carrier, fell into bankruptcy in 2019 under mounting debts. Dubai-based businessman Murari Lal Jalan and Kalrock Capital Management Ltd. in London laid out a rescue plan, pledging in December that the airline would fly again by this summer, operating its historic domestic slots as well restarting international routes.

“They have to work together with the ministry officials and airports to obtain the slots. In some airports it may not be possible to operate the exact same slots,” Chhawchharia told Bloomberg on Tuesday. “If everything goes well, we can hope by end of this year Jet Airways can fly again.”

The revival plan also included a dedicated freighter service and hubs in smaller cities beyond Delhi, Mumbai and Bengaluru.

CNBC-TV18 reported earlier Tuesday that Jet Airways needs to apply for slots within 90 days and the aviation regulator will make a final decision on allotting them.

Even before Covid-19 crushed demand for air travel, India was a tough place to make money in aviation. Bruising fare wars and high costs made it difficult for many carriers to survive. Kingfisher Airlines Ltd., once the country’s second-largest domestic carrier, collapsed in 2012, and flag carrier Air India Ltd. is saddled with debt and has been searching for a buyer for years.

Jet Airways has almost 21,000 creditors seeking claims of around $6 billion. It lost most of its landing slots in the time it hasn’t being flying.

Investors remained optimistic about the airline successfully emerging from a restructuring, sending its shares up 316% in 2020 despite the crisis in aviation. Still, they remained far off peaks hit during the previous decade. Jet Airways rose 5% on Tuesday following a similar gain the previous day.

“It’s a certainly very satisfactory and favorable ruling,” Chhawchharia said.

©2021 Bloomberg L.P.