Jet Airways to sell one of its Boeing 777 aircraft to Netherland's KLM

Jet Airways is selling one of its six Boeing 777 aircraft to KLM to settle pending aircraft loan and meet insolvency resolution expenses in the Netherlands. A conditional agreement between the two airlines was signed on Monday and notified to the stock exchange on Friday.

As a part of the agreement, Dutch airline KLM will purchase a Jet Airways Boeing 777 aircraft, which was seized in Amsterdam last April, along with the grounded airline's marketing data and catering equipment. It has sought three slot pairs held by Jet Airways at Amsterdam airport and hopes to use them to increase services to India.

The deal value has not been disclosed, but sources said could fetch the airline around $23 million.

Jet Airways, which shut operations last April, is facing liquidation in the Netherlands. Proceeds from the aircraft sale will be used for insolvency resolution and to settle US Exim Bank loan, giving the grounded airline ownership of the remaining five Boeing 777 planes.

The transaction is beneficial to Indian lenders as it would help in releasing the Exim Bank’s charge on the planes, said a person aware of the transaction. Jet Airways is undergoing insolvency in India since July.

Efforts to find a committed suitor have not yielded the desired result, and those that have shown interest have attached riders for investment.

In its stock exchange notification, resolution professional Ashish Chhawchharia said various options are being explored for the airline’s revival and maximising value for its stakeholders. “The proposed transaction under the conditional agreement, if completed, will only involve sale of a part of company's business activities and will not impact the shareholding pattern of the company in any manner,” Chhawchharia said.

Slots cannot be purchased or sold at Amsterdam’s Schiphol airport. A decision on KLM’s application for Jet’s slots is expected in two weeks.

“KLM and Jet Airways had combined activities between India and Schiphol to connect India with Europe and North America. After the bankruptcy of Jet Airways, KLM is trying to continue and repair this part of the route network as much as possible. To achieve this, KLM is investigating a possible takeover of the Amsterdam part of the assets of Jet Airways," KLM said.