Jet Airways Revival Hopes Dash, As Sanjiv Kapoor Leaves The Airline

Sources in the know confirmed to Mint that it was Kapoor last day at work at the airline. “It was his last day at work today, which was the last day of his notice period," confirmed a source in the know.

The entry of Kapoor, who has previously worked in key positions at Vistara and Spicejet and had joined Jet from Oberoi hotels, had given the industry hopes of a revival of the airline. Kapoor’s exit is set to dash all hopes.

Jet Airways’ Air Operators’ permit, which was renewed a year ago, is set to expire next month and the airline has not yet applied for its renewal, indicating towards an unlikely resumption of service by the airline.

Last May, the Directorate General of Civil Aviation (DGCA) reissued the AOC of Jet Airways and it is valid until 19 May.

The regulator had also asked the airline about its flight resumption plans as the private carrier continues to stay grounded nine months after the aviation regulator reissued its flying permit.

Under the civil aviation requirements, a scheduled commercial airline operator is required to have a fleet of at least five planes, either by outright purchase or through commercial lease. To facilitate start of operations, an applicant is allowed to commence flight services with just one aircraft and meet the requirement of five planes within a year of obtaining the AOC.

After more than 25 years of operations, full-service airline Jet Airways was grounded on April 17, 2019 amid a severe cash crunch. The insolvency process began in June 2019 and the NCLT approved a resolution plan submitted by the Jalan-Kalrock Consortium on June 22, 2021. At the time, Jet faced a standoff between the banks and the Jalan-Kalrock consortium over the airline’s ownership transfer.

The National Company Law Tribunal (NCLT) on 13 January allowed the airline’s transfer of ownership to the consortium. The lenders, however, had sought a stay on the order, which was rejected by NCLT.

The two parties also have differences on the issue of paying pending staff dues. In January, the consortium filed an appeal before the Supreme Court seeking a stay on the NCLAT’s 21 October order directing the consortium to clear unpaid provident fund and gratuity dues of ₹250 crore to former employees of the airline. The plea was later dismissed by the apex court, which upheld the NCLAT order.

“The lenders have approached the NCLAT against the NCLT order on transfer of ownership to Jalan-Kalrock Consortium as they continue to be of the view that JKC has not met all conditions required for the transfer. That hearing is pending. Simultaneously, there are other legal battles with employees, their unions whenever they submit claims on their dues," another person aware of the development said.

“The matter is complicated and remains to be seen whether the resolution of this issue and acquisition of aircraft for commencing operations can take place by mid-May. They may need to re-apply for AOC, if legal battles continue beyond May as well," he added.

According to the plan, the Jalan-Kalrock consortium had proposed a cash infusion of ₹1,375 crore, including ₹475 crore for payment to stakeholders. The rest ₹900 crore was to be infused for capital expenditure and working capital requirements. At ₹380 crore, the lenders took a steep haircut on their admitted claims of over ₹7,807.7 crore under the approved resolution plan.