Sale of ex-Jet Airways B777s to Ace Aviation remains on hold
A bid by Malta’s Ace Aviation VIII Ltd to buy three parked B777-300ERs belonging to Jet Airways (JAI, Mumbai International) has hit a roadblock after India’s National Company Law Appellate Tribunal (NCLAT) declined to approve the transaction until the airline’s ownership change is finalised.
ACE approached the appellate court after the Delhi bench of the National Company Law Tribunal (NCLT) rejected an application to purchase the planes in July. Counsel for ACE, Ritin Rai, told the courts a letter of intent to buy the aircraft for INR4 billion Indian rupees (USD48.1 million) had been signed by his client and the Jet Airways’ creditor’s committee, with a INR500 million (USD6 million) deposit already paid.
But both the NCLT and NCLAT agreed that the sale of the aircraft could not be considered until the ownership of the airline was settled. In late 2020, the Jalan-Kalrock consortium (JKC) won a bid to buy Jet Airways, which had ceased operations in 2019. In mid-2021, the NCLT approved a resolution plan, which would see the JKC pay creditors some of the monies owed to them and recapitalise the airline, in exchange for ownership transferring to them.
Owing to ongoing disputes between the creditor’s committee and JKC, this process is yet to get underway, despite multiple interventions and time extensions from the NCLT. Most recently, the creditors’ committee agreed to back down on a push to invalidate the resolution plan and wind up the airline if JKC paid them INR3.5 billion Indian rupees (USD42.2 million) by an August 31 deadline.
This particular matter relates to a successful bid in late 2022 by Ace Aviation VIII Ltd to buy three ex-Jet Airways B777s in an auction run by the Jet Airway’s monitoring committee. According to a Business Standard report, a Belgian cargo airline – Challenge Airlines BE (X7, Liège) – owns the Ace Aviation VIII Ltd entity. The transaction was due to finalise by the end of 2022, with Ace paying the deposit. However, the Jet Airways’ monitoring committee, which had managed the auction, reportedly stopped responding to communications from Ace.
Rai told the NCLAT last week that the JKC’s resolution plan indicated they have no intention of using previous Jet Airways aircraft in any relaunch. But lawyers for the consortium were back in court earlier this year trying to block the sale. That legal bid culminated in July’s NCLT ruling, which became the subject of this most recent appeal.
While the NCLAT has refused to entertain any aircraft ownership transfer application while ownership of the airline remains uncertain, the August 31 deadline for JKC to pay creditors is shaping up as crunch time. The consortium has recently said it can meet all financial commitments per the original resolution plan and is well capitalised. India’s Directorate General of Civil Aviation recently re-issued it a temporary air operator’s certificate to help clear some administrative hurdles the airline faces. The NCLAT has re-listed ACE’s aircraft application for hearing on September 6, saying there should be more clarity on the airline’s ownership by the
Creditors of India’s Jet Airways set conditions to drop suit
The committee of creditors standing in the way of the Jalan-Kalrock Consortium (JKC) taking control of Jet Airways (JAI, Mumbai International) has told India’s National Company Law Tribunal (NCLT) that they will drop their application to wind up the grounded carrier if the consortium sticks to a new deadline and pays INR3.5 billion Indian rupees (USD42.2 million) by the end of the month.
In July, counsel for the committee of creditors told the NCLT that Jet Airways should be wound up because the previously agreed upon and NCLT-approved resolution plan was unworkable, and winding up was the only way creditors would recoup any funds.
The JKC secured the rights to take over Jet Airways in 2020, following its collapse the previous year owing around INR80 billion (USD965.5 million). In June 2021, the NCLT approved a resolution plan that would see the consortium pay creditors INR4.35 billion (USD52.5 million) over an agreed timeline, plus infuse capital into restarting the airline. However, the relationship between the consortium and the committee of creditors has broken down, with…
India’s Jet Airways secures interim AOC
India’s Directorate General of Civil Aviation (DGCA) has granted Jet Airways (JAI, Mumbai International) an interim air operator’s certificate (AOC) “for the limited purpose of completing the ongoing corporate insolvency resolution process.”
The permit, reissued on July 28, is valid until September 3, 2023. The grounded carrier’s previous AOC lapsed in May. September 3 is also the new deadline for the nominal new owners of Jet Airways, the Jalan Kalrock Consortium (JKC), to start meeting their side of the approved resolution plan. Before the start of September, Jet Airways will also have to undergo re-certification per India’s air operator certification procedures and demonstrate compliance with all the applicable regulatory requirements. The National Company Law Tribunal (NCLT), which is overseeing the ownership transfer process, also expects a coherent business plan detailing how the consortium intends to restart the airline by the September deadline. Nonetheless, the interim AOC is widely interpreted as a sign of confidence from the DGCA concerning Jet Airways’ prospects.
JKC says securing the AOC, even for a short period, demonstrates their commitment to…
India’s Vistara ends B737 operations
Vistara (UK, Delhi International) has retired its final B737-800, with the 9.97-year-old VT-TGE (msn 39061) operating its last revenue flight for the airline on July 26 from Kochi International to Delhi. Vistara has operated nine B737-800s since 2019.
The Indian airline, which has a pronounced lean towards Airbus narrowbodies, said the B737-800s had been an “integral part” of its operations. The addition of the B737-800s to the Vistara fleet occurred after the collapse of Jet Airways (JAI, Mumbai International) and was an opportunistic move to meet capacity requirements while waiting for Airbus orders to arrive. But within 12 months of acquiring the Boeing narrowbodies, Vistara began exiting them. The airline was down to three B737-800s at the start of 2023, but retired VT-TGH (msn 39066) in February and VT-TGB (msn 39058) in May.
Most recently, VT-TGE had been operating UK885/886 between Kochi and Delhi and UK895/896 between Thiruvananthapuram and Delhi. Those flights will now be serviced by an A320-200N.
With the B737-800s gone, Vistara…
India’s Supreme Court tells Jet Airways to reinstate staff
India’s Supreme Court has instructed bankrupt Jet Airways (JAI, Mumbai International) and its new owner, the Jalan-Kalrock Consortium, to reinstate 169 of its temporary workers with full back wages, The Economic Times newspaper and the Indian legal news site Verdictum reported.
The grounded and indebted carrier cannot waive the provisions of the Bombay Model Standing Order, a legal provision that protects the rights of workers, the court ruled quashing earlier judgements to the contrary at the Bombay High Court and the Central Government Industrial Tribunal.
The two-judge bench at the Supreme Court held that “a workman who has worked for 240 days in an establishment would be entitled to be made permanent, and no contract/settlement which abridges such a right can be agreed upon, let alone be binding.” The judges added that under Indian legislation, any agreement, contract, or settlement in which the rights of employees are waived “cannot override the Standing Orders.”
According to the court’s reading of the Bombay Model Standing Order, an employee who has worked at a company for 240 days…
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