Jet Airways insolvency: Will positively consider concrete business plan for troubled-airline, DGCA tells NCLT

Mumbai: The Aviation Ministry and Directorate General of Civil Aviation (DGCA) on Tuesday informed the National Company Law Tribunal (NCLT) that they will positively consider any concrete business plan for the grounded Jet Airways. The counsel representing the Ministry told the tribunal that it will examine the issue if Jet Airways prospective investors come up with a concrete business plan. He further said that slots are perishable assets and it cannot be utilized by other airlines. The deadline for applying for the next round of airport slots is 15 January. Airport slots, the permit for arrival and departure at an airport, play an important role for potential bidders to value the grounded airline. [caption id=“attachment_5554021” align=“alignleft” width=“380”] Representational image. Reuters.[/caption] The Ministry further said that two new foreign investors have shown very early interest for the grounded airline besides South Americas Synergy Group, which is the sole company to have shown interest in Jet Airways till now. Earlier on 11 December, the tribunal comprising Bhaskara Pantula Mohan and Rajesh Sharma had asked senior officials from the Civil Aviation Ministry and DGCA to depute responsible officials for Tuesday hearing. The Tribunal had once again directed the regulator DGCA and the aviation ministry to give clarity on the available Jet Airways slots. The NCLT will hear the Synergy Group on Thursday about the companys clarifications on its stand on the airport slots. After Jet Airways went bust in mid-April, the government temporarily allotted the hundreds of slots owned by Jet to other carriers, with an apparent bid to contain soaring airfares in the peak holiday season. The slots were first allotted to other airlines (mostly Spicejet) for three months, which was extended to December-end. The counsel of the grounded airline said the lack of clarity on the slots has resulted in a ‘chicken and egg’ situation for South America’s Synergy Group. Synergy Group sought more clarity on slots before submitting a resolution plan. The last date for submitting a resolution plan is 16 December. On previous occasions, too, NCLT had sought details of Jet Airways slots. The DGCA had initially sought two weeks to provide clarity on the slots available but has not done so even after months. Ashish Chhawchharia, the RP, sought to include DGCA and ministry as parties to the ongoing resolution process. “Synergy Group, which owns several airlines in South America is conducting due diligence and they are the only serious bidder, and are constantly in touch with us and seeking more time to evaluate their options,” Chhawchharia had informed the tribunal. Since the schedule for winter slots were gone and slots for the summer season to be declared on 15 January, NCLT had asked the authorities to provide clarity on slots. The lenders, who had been owning the airline since 25 March with 51 percent stake, had on 17 June sent the airline for bankruptcy, and could not find a buyer so far. The airline owes over Rs 8,500 crore to a consortium of 26 banks led by State Bank, and over Rs 13,000 crore to the tens of hundreds of vendors and around 23,000-odd employees.