With the wait to board Jet Airways getting longer, the Jalan-Kalrock consortium may be forced to 'reset' the timeline to revive the airline. While the earlier plan was to get Jet 2.0 in the air by April, the re-launch may get pushed by 90 days, sources close to the development told Moneycontrol.
At the same time, the consortium is using the time in hand to fine-tune its strategy to revive the airline, especially amid the new circumstances post-COVID-19.
"The emphasis will be to control costs and generate cash flow at the earliest. The priority thus is to first start off with cargo operations, given that demand for freight, especially with India emerging as the vaccine hub, continuing to be robust," said a senior executive from the industry, in the know of things.
The consortium had won the bid for Jet Airways in October 2020 and had plans to re-launch the airline by the summer of 2021. For that it was crucial to get the clearance from the National Company Law Tribunal by January, in order to get slots for the summer schedule of airlines that is released by regulator Directorate General of Civil Aviation, or DGCA.
But that timeline has been disrupted with multiple hearings and petitions. The Mumbai bench of the NCLT will now give its order on February 22 whether or not to share the resolution plan of Jet Airways with its employees.
Meanwhile, the State Bank of India - the airline's lead banker - had filed an appeal with National Company Law Appellate Tribunal, asking it to direct the NCLT to expedite the approval process. In January itself, an association of engineers working in Jet Airways had filed an application to fasten the proceedings.
Jet Airways was grounded in April 2019. Hopes of many of its employees had soared after the consortium of UAE-based businessman Murari Lal Jalan and London's Kalrock Capital won the bid for the airline.
Plans reset and the new timeline
While domestic flights resumed in May 2020, post the lockdown in March, passenger traffic had recovered to about 56 percent of pre-COVID-19 levels, by December. Much of the demand has been from tier-2 and 3 cities. Airlines, especially SpiceJet, have also seen high demand for cargo.
While the winning consortium had talked about focusing on smaller routes, instead of the metro ones, the strategy has now been reinforced. "Cities like Ahmedabad have just taken off. While this doesn't mean that Jet 2.0 will not fly between metro routes like Delhi-Mumbai, it doesn't want to be in cut-throat competition. Thus the emphasis on non-metro routes," said an airline executive aware of Jalan-Kalrock plans.
Executives added that the combine has been in talks with governments, both in India and overseas, exploring options to fly cargo, including vaccines, using Jet Airways's fleet. The airline has 12 aircraft in its fleet, at the moment.
"The consortium has held talks with lessors and doesn't see any issues in getting aircraft when needed. The government has also assured it of slots," said the senior industry quoted earlier in the story.
The NCLT has asked the DGCA to respond on the availability of the slot.
"The aspiration now is to resume operations by the third quarter of the calendar year, or during the festive season," the executive added. By then, the growth in passenger traffic could be nearly the same as pre-COVID-19 levels.
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