Jet Airways' Return To Skies Delayed With Aircraft Talks In Limbo: Report

Jet Airways can’t sell tickets in September because lenders are reluctant to allow it to take on any fresh liabilities such as an aircraft order

Jet’s Chief Executive Officer Sanjiv Kapoor in a tweet said that it takes time to get something as complicated as relaunching an airline right. ( Image Source :Getty )

As planned earlier, Jet Airways Ltd won’t return to the skies this month, quoting some sources, news agency Bloomberg reported on Tuesday.

Jet, once India’s top private carrier, can’t sell tickets in September because lenders are reluctant to allow it to take on any fresh liabilities such as an aircraft order, sources privy to the development said. Jet is also still in talks with plane manufacturers and lessors to obtain contracts, one of the sources told Bloomberg.

A representative for Jet’s new owners in a statement said the airline is “very close” to finalising its initial fleet plan and preparing to start sales and resume operations “in the coming weeks,” while adding, “There is no deadline; target dates are set by us alone, and we have always maintained that this is a marathon, not a sprint.”

There are no restrictions on Jet placing an aircraft order and it’s free to add new assets, according to the statement.

Earlier, Bloomberg reported that Jet is in advanced talks to order about 50 Airbus SE A220 aircraft. The carrier is also in discussions with Boeing and Airbus to potentially place a “sizable” order for the 737 MAX or A320Neo families of jets.

After collapsing in debt in 2019, Jet is being taken over by Dubai businessman Murari Lal Jalan and Florian Fritsch, chairman of London-based financial services firm Kalrock Capital Management Ltd. They vowed to get the carrier back in the air by March this year, but Jet hasn’t placed an order for any new aircraft after the majority of its old fleet was leased to other airlines. It has, however, started hiring staff and begun a social media campaign.

The country’s bankruptcy court will hear on the progress of the new owners’ rescue plan for Jet on October 11. The regulator will be informed as soon as Jet finalises aircraft and engine deals, a representative for the Jalan-Kalrock consortium said.

“Starting or restarting an airline is a complex business, and we want to be sure we take the time to get the best possible terms and contracts for both aircraft and engines, including maintenance contracts, as well as to receive aircraft configured the way we want,” the statement from the new owners said. “If that takes a little more time to get right, that’s fine.”

Some Boeing Max jets originally earmarked for Chinese airlines are available amid uncertainty over the China’s Covid policies and travel curbs, while Airbus’s A320Neos can be leased. Planemakers will likely demand a sound business plan and financial assurance from Jet before assigning it any aircraft.

Jet’s Chief Executive Officer (CEO) Sanjiv Kapoor has hit back at naysayers, taking to Twitter to defend the carrier’s recovery. He recently tweeted that it takes time to get something as complicated as relaunching an airline right.

Because this is not an order for fast food from Swiggys. Aircraft and engine orders are worth billions, and one must take the time to get it right so as to not repent later.

— Sanjiv Kapoor (@TheSanjivKapoor) August 30, 2022

Kapil Kaul, CAPA Centre for Aviation’s South Asia chief executive officer, said that funding will be critical for Jet.

“You need a war chest to survive, especially the first two to three years,” he said. “Getting the business model right in the current hyper-competitive environment, along with adequate capitalization, are the two important pivots for Jet going forward.”

Any successful revival of Jet, which forced creditors to take a 95 per cent haircut, would be the first for any airline under bankruptcy laws and should bolster Prime Minister Narendra Modi’s image as a business-friendly leader.