Jet Airways relaunch faces delay as airline fails to end deadlock with engine makers and lenders

Launched in 1993, Jet Airways suspended its operations in April 2019.

Jet Airways, under its new owner the Jalan-Kalrock consortium, faces delay in relaunch which is scheduled for this month, The Economic Times reported on September 19 citing people with knowledge of the matter.

The first deadlock is over proposed leasing contracts between management and engine makers. Jet wants engine makers Pratt & Whitney (P&W) or CFM to bear a larger share of the costs whenever an engine is replaced, according to ET sources.

The second deadlock is with Jet’s lenders seeking settlement of dues before the airline buys or leases aircraft.

The lenders wants the new owner to obtain a no-objection certificate before leasing or purchasing planes.

The consortium has offered payments of Rs 380 crore in instalments and a 9.5 percent stake in the airline to the lenders.

“Starting or restarting an airline is a complex business and we want to be sure we take the time to get the best possible terms and contracts for both aircraft and engines, including maintenance contracts, as well as to receive aircraft configured the way we want them, to meet our strategic requirements and to secure our future,” said Sanjiv Kapoor, Jet’s new chief executive.

“If that takes a little more time to get right, that is fine. As the saying goes, ‘act in haste, repent at leisure’. ”

Launched in 1993, Jet suspended operations in April 2019. It is now being revived by the consortium under the Insolvency and Bankruptcy Code. In a first in Indian aviation history, an airline is being revived under its own name after being grounded for an extended period.