Creditors approve Jet Airways Resolution plan

Creditors to Jet Airways have approved a resolution plan which will give the country’s oldest private carrier a new lease of life, the airline said in a regulatory filing on Saturday.

The plan submitted by a consortium of London-based Kalrock Capital & UAE-based businessman Murari Lal Jalan comes after months of talks over the airline’s future & was confirmed in the regulatory filing, which gave no details of the deal.

A person aware of the developments said the new owners agreed to pump in ₹1,000 crores as working capital for the revival of the airline. Another ₹1,000 crores will be given to creditors over a period of 5 years.

Financial creditors of the airline will also get 10 per cent stake in the company, the person said, though the plan remains subject to approvals from the bankruptcy Court & the country’s airline regulator.

Jet Airways — which operated a fleet of more than 120 planes serving dozens of domestic destinations & international hubs such as Singapore, London & Dubai — was forced in April 2019 to ground all flights, crippled by mounting losses as it attempted to compete with low-cost rivals.

After Jet halted operations, at least 280 slots were vacant in Mumbai & 160 in Delhi, which were then given to its rivals. The revival plan is also based on getting some of these slots back.

“The plan is to ramp up slowly & to increase capacity gradually as they will be starting afresh,” the person quoted above said. Any resumption of flights will likely not happen for between 3 & 6 months at least. Since its operations were halted, the airline & its lenders had been looking for suitors. Jet’s financial & operational creditors were owed nearly ₹30,000 crore after the operations were halted. 

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