Jet Airways continues to find further impediments as the Directorate General of Civil Aviation (DGCA) insists that the Jalan Kalrock Consortium (JKC) rectify outstanding issues with lenders before obtaining approval for its Air Operators Certificate (AOC). The DGCA has mandated JKC, the winning bidder of Jet Airways, to address unresolved matters with lenders and provide evidence of their financial capability as prerequisites for the AOC to be granted.
According to senior officials, the DGCA has guided the management of Jet Airways, stating, “The AOC can be granted; however, the management needs to iron out all these issues before it can be granted.” These issues include the frequent resignation of key personnel, the absence of a formed board, legal disputes involving the management and lenders, and the need for secured aircraft lease agreements.
Citing the example of GoFirst, which filed for voluntary insolvency two months ago, the official said, “In the case of GoFirst, the lenders are backing the company, and the company too has come back with a plan. Though, they have their own issues too, but, that makes their process smoother at least for now.”
The DGCA will conduct a safety audit between July 4-6 before granting an AOC to GoFirst as well.
Several setbacks
Jet Airways officials had initially applied for the AOC last year as part of the airline’s relaunch process. However, the AOC expired in May of this year. In an attempt to move forward, the current management of Jet Airways approached the DGCA seeking approvals for a fresh AOC. Unfortunately, several setbacks have hindered progress.
A company official confirmed that the request for an AOC was not accepted. However, they mentioned that the process of submitting the names of board members to the DGCA was underway. The consortium, JKC, has also been actively engaging with lenders to resolve funding-related technical issues, the person added.
In May, JKC approached the National Company Law Appellate Tribunal (NCLAT) seeking directions to prevent the State Bank of India (SBI) from invoking its bank guarantee worth ₹150 crore. The NCLAT has granted an extension until August 30 for JKC to fulfill its payment obligations.
Meanwhile, the position of CEO at Jet Airways remains vacant. Company sources claim that the airline recently signed a Letter of Intent (LoI) with a US-based aircraft OEM for the potential lease of at least eight aircraft. The validity of the LoI is stated to be three months, but this information could not be immediately verified by businessline.
Jet Airways was forced to ground its operations in April 2019 due to mounting losses and debt of approximately ₹8,000 crore. In October 2020, the airline’s Committee of Creditors (CoC) approved the revival plan submitted by the consortium.