Jet Airways Re-Launch Is Delayed Because Previous Payments Are Not Cleared

Jet Airways’ relaunch is increasingly looking unlikely to ever happen.

Relaunch again postponed

The Jalan-Kalrock consortium, which owns Jet Airways, had won the airline through the Insolvency and Bankruptcy Code (IBC) process.

However, the relaunch has to once again be shifted since the consortium has not yet fulfilled its various payment obligations — and the deadline is looming.

Two deadlines

There are two deadlines which have to be met and as things stand, it looks to be in danger of missing both.

First, the consortium had to pay Rs 52 crore to workmen and employees of the airline by the end of business on November 11.

The second has to do with the payment of Rs 185 crore to various lenders.

The consortium has till November 16 to make this payment.

It had proposed to pay employees within 175 days, and lenders within 180 days from the effective date.

Ownership hanging in the balance

It is only after the first tranche of payments to lenders is made that they can get ownership of Jet Airways.

And if it doesn’t get transfer of ownership, it cannot lease aircraft in the name of Jet Airways.

The relaunch target has already been extended by the consortium multiple times.

It never hit its last target of October either.

The pending dues

The recent NCLAT order directed the consortium to pay provident fund and gratuity dues in full for all eligible employees until the commencement of insolvency — that’s till June 2019.

This works out to over Rs 200 crore.

The consortium has not deposited any of the Rs 900 crore it had committed towards capex and working capital requirements either.

So it can be concluded that with the proposals and the commitments, the consortium has to pay close to Rs 237 crore – not including the statutory dues.