MUMBAI- 15th December, India’s Oldest private airlines face another hurdle as NCLT board approve the European airlines plan to acquire jet airways 3 Boeing 777 aircrafts. Also, in last hearing the Lenders request was accepted by NCLT regarding Jalan-Kalrock Consortium (JKC) to settle unpaid provident fund and gratuity dues of employees.
Jet Airways Aircraft At Stake
The European Cargo airlines holding company, Ace Aviation has been emerged as bidder who has successfully won the contract to acquire 3 Boeing 777 aircrafts. The Malta based firm is parent of ACE Belgium freighters, Belgium registered cargo airline. The airline had also put forward an application to change its name to Challenge airlines.
The Ace Aviation Company has found to be involved in offshore dealings. As its name has been leaked in Paradise Papers., Offshore leaks database.
The application by Ace Aviation will place a new challenge for JKC as the Lenders and airline Union have opposed the sale of any assets until Employes PF and gratuity is paid off,
The Malta based firm has also paid 4.6 million US dollars (approx. 38 crore INR) as earnest money deposit which is good faith money. Along with Earnest deposit they have also paid the Token money deposit. It has also paid one million US dollars to participate in further auction round for remaining 2 Boeing 777s.
Today Jet has around 9 aircrafts which includes, 4 B737s and 5 B777s. While Jet has leased 5 A320neos from other airlines and lessors. But the big question is will Jet be able to revive its airline business?
Ace Aviation was all set to receive deliveries by 16th December. But on 11th December, they received a mail from the monitoring committee on abeyance of sale process till further notice. The mail read as, “We expect to resume the deal within the next 60 to 90 days approx.”
The Firm replied to email, “The point to keep the sale process in abeyance for an extended period for up to 60 to 90 days approx. provides no specific time limit to the auction & sale process and accordingly gives no assurance to the buyer…Furthermore, extending the time-limit without any valid reason whatsoever is arbitrary and contrary to commercially reasonable and prudent standards. Moreover, on each day of delay, the assets are depreciating in value….,” and they also asked for speedy delivery.
In short, NCLT has not yet sold Jet Airways assets and will put on hold the bidding process until there is some decision over the resolution process.
Trouble from Ex-Employees and Lenders
The Airlines Officers & Staff Association in Nov 2022 served a notice to the monitoring committee saying that no sale of assets of Jet Airways can be undertaken until such a time that payments of Provident Fund and gratuity dues to employees are completed in accordance with court final Order.
The NCLT board has also accepted the request of Employees and told JK consortium to pay the dues. To challenge the NCLT order, Owners is likely to knocked at the door of Supreme court.
NCLAT stated that JK Consortium would be liable for unpaid PF payments and gratuities per the authorized plan for the airline’s sale. Board ordered those payments to staff be made within 30 days from December 2, 2022.
Jet Airways Cabin Crew Association (JACCA) includes around 700 cabin crew staff, who are fighting to get 1.1 billion Indian Rupees (Equivalent to USD 13.7 million) of unpaid salary.
However, SBI want jet to pay another 2.5 billion INR as a retirement fund. While owner refused the payment of additional money as they stated, it was not part of resolution plan.
Future is Fade for Jet 2.0
The Jet’s new owner has done all they can to revive the airlines, but the Lenders and Employees Valid demand needs to be heard and fulfilled. But the amount needed for PF payments are huge and will be difficult to pay without any incoming financial aid.
Recently, the Julian Carr Chief Marketing Officer, CMO (Airlines & Route Development), GMR Airports Ltd said, “newcomers such as Akasa Air & Jet Airways 2.0 are moving ahead in a “very tough environment”, where even well established and renowned airlines are struggling in certain areas.”
We hope that all the disagreements between owners and employees get resolved and we can see Jet back into the skies. Will be a greatest ever comeback as its never happened before that airline shut down in India has been successfully revived. Time will tell us what will happen to Jet 2.0?
Tell us what you think about Jet’s trouble, and will it be able to make comeback? in the comment section or in our social media page.
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