Jet Airways plans to resume as full-service airline in summer of '21

For businessman Murari Lal Jalan and consortium partner Kalrock, reviving airline is an opportunity

The new owners of Jet Airways plan to operate it as a full-service airline with a strong presence in the domestic market while connecting prominent European and West Asian cities with Delhi, Mumbai, and Bengaluru. 

Jet, which was grounded in April 2019 as it ran out of cash and failed to get emergency funding, will remain listed, according to a person close to the owners. He also indicated that the airline will possibly return to the skies in the summer of 2021.   

Murari Lal Jalan, the businessman who led the winning consortium for Jet, plans to hold more than 51 per cent stake in the airline. Around 14 per cent will be held by London-based financial advisory firm Kalrock Capital while lenders will keep close to 10 per cent in the Naresh Goyal-promoted airline. 

Jalan, with diverse business interests ranging from paper trading to real estate across Russia, Uzbekistan, UAE and India, has started meeting policymakers, aircraft manufacturers, vendors and has assured there will be no dearth of funding to revive the airline, the source said. While the consortium has proposed to invest around Rs 1,000 crore, the new owners are expected to infuse more money after the regulatory clearance.

“Both promoters have persona and business net worth. We are very optimistic about the business and if all regulatory approvals come on time, we plan to start operations in six months. We want to take Jet Airways back to its heydays,” the person quoted above said.

Murari Lal Jalan, the businessman who led the winning consortium for Jet

The resolution plan proposed by Kalrock Capital and Jalan was approved by the lenders of Jet Airways in October and is currently awaiting approval from the National Company Law Tribunal (NCLT).

The resolution plan of the company hinges on successfully getting back airport slots and bilateral rights. When it shut operations, Jet Airways had close to 700 such slot pairs, including 116 and 214 in Delhi and Mumbai airports.

“We have started dialogue with the government for getting back slots and bilateral rights,” said the person.

In February, when the government allowed non-resident Indians (NRI) to own 100 per cent stake in airlines, Jalan took note. He asked his team if bidding for the national carrier made sense. But, the maths didn’t quite excite him.

By June, when Jalan had approached Kalrock, founded by serial entrepreneur and chairman Florian Fritsch, the pandemic had ravaged the aviation industry, leaving planes grounded and thousands of employees jobless.

Why would any businessman look at buying an airline at this point? Since the cost of starting an airline from scratch has reduced drastically, Jalan was encouraged to bid for Jet, the person aware of the sequence of events pointed out.

“We have been closely monitoring the insolvency process of Jet Airways for almost a month. The pandemic gave us an opportunity as it has lowered the cost of acquiring the aircraft and manpower drastically. 

Jet has the brand value, customer confidence, infrastructure like slots and bilateral rights while the liabilities are being wiped off. We are getting a clean slate, which would not have come with Air India,” the person said.

At present, various creditors have a combined claim of over Rs 25,000 crore against the airline. This includes claims of over Rs 8,000 crore by financial creditors, who are likely to recover only a fraction of their dues.

“Be it aircraft manufacturer, lessors, airports, airline partners or vendors, everyone we have approached is ready to do business with us. 

They understand that Jet Airways has a new management and is ready to forget what happened under the previous regime,” the person said.