Time is running out for the airline, as the 270-day insolvency process runs out in March
Even as the deadline to submit bids for Jet Airways expires later on February 17, there is apprehension in the industry if the airline will finally get a bid, or if there will be yet another extension.
Two suitors remain. One is South America’s Synergy Group that has now been trying to woo Jet Airways for nearly six months but has not been able to submit a bid yet.
The second is the newcomer Prudent ARC, a New Delhi-based firm that put in the Expression of Interest on January 15.
Even as there is murmur of a new interest in Jet Airways, will the airline land a proposal?
Looking ahead
In the last one month, a couple of interesting developments have occurred, signally that, while some have moved ahead, others are still hoping for a revival of the airline that suspended its operations in April 2019.
Vinay Dube, who was the chief executive when Jet Airways was forced to stop operations, has taken over as the CEO of GoAir. Soon after exiting Jet Airways in May 2019, Dube started advising GoAir.
To his credit, say insiders, Dube rallied around several Jet Airways stakeholders - including its employees - to find a way to keep the airline flying. Surely, there was no quick fix for the carrier that now has a total liability north of Rs 20,000 crore. It owes banks about Rs 8,000 crore.
In another development, The Economic Times reported that employees of JetLite, the low cost arm of Jet Airways, had moved the National Company Law Tribunal, to be included in the latter’s insolvency process.
As Moneycontrol reported in 2019, the resolution professional overseeing the insolvency process had rejected claims of JetLite employees.
JetLite was formerly Air Sahara, bought by Jet Airways in 2007. Consequently, it operated as a budget carrier. JetLite remained a separate entity, and its brand was Jet Konnect. It was a part of the Jet Airways “group”. And, that is probably the reason for the rejection.
JetLite employees have claims of about Rs 50 crore, which may seem like a small amount compared to the total claim. But it is a reminder that thousands of employees of the airline are still hopeful that the insolvency process will end with a new owner, who will clear their salary arrears.
But, time is running out. The 270-day period of the insolvency process ends in the second week of March, just a month away. Will the Jet Airways lenders manage to get a buyer? Or, as it increasingly seems, will the once-feted airline head for liquidity?Exclusive offer: Use code "BUDGET2020" and get Moneycontrol Pro's Subscription for as little as Rs 333/- for the first year.
