India’s Supreme Court has mandated the liquidation of Jet Airways, directing the immediate appointment of a liquidator for the bankrupt airline.
The Court found that the successful bidder for the ailing airline, Jalan Kalrock Consortium (JKC), had failed to comply with the conditions of a resolution plan.
In issuing the direction, the Supreme Court cited the “peculiar and alarming” situation where the resolution plan had gone unimplemented for five years.
Jet Airways: The Final Chapter
Jet Airways was once a symbol of India’s burgeoning aviation industry, and held the recognition of being the nation’s leading airline. The decision by Court puts to an end a long struggle which sought to restore the troubled carrier.
On November 7, 2024 the Supreme Court of India, using special powers under Article 142 of the Constitution, ordered the liquidation of the airline.
In doing so, it set aside a previous order by the National Company Law Appellate Tribunal (NCLAT), which had upheld the transfer of airline ownership to JKC in March 2024.
Founded in 1992 by Naresh Goyal, Jet Airways quickly established itself as a premium carrier. It was known for its world-class service and luxurious amenities. The airline expanded rapidly, both domestically and internationally, becoming a significant player in the global aviation market.
However, a series of missteps and financial mismanagement led to the airline’s downfall. Rising fuel costs, intense competition, and heavy debt burden pushed Jet Airways to the brink of collapse.
In April 2019, the airline was forced to suspend its operations. The closure left thousands of employees jobless and millions of passengers stranded.
A Failed Revival Attempt
In a bid to revive the ailing airline, the Jalan Kalrock Consortium (JKC) emerged as the successful bidder in the insolvency proceedings. The consortium promised to inject fresh capital, restructure the airline, and restore its former glory.
However, the implementation of the resolution plan faced numerous hurdles, including legal challenges and financial constraints.
The JKC consortium stated that it had made every effort to restore the airline to operational status. It accused lenders of intentionally stalling recovery efforts in order to push the airline towards liquidation.
During the Court hearings, the lenders argued that Jalan Kalrock Consortium had failed to fulfil critical obligations. This had been outlined in the recovery plan. The lenders also claimed that JKC had failed to meet several operational requirements. They failed to secure an air operator certificate and airport slots necessary for an operational restart.
The Supreme Court’s ultimate decision to order liquidation came after the finding that JKC had failed to comply with the terms of the resolution plan. This notably included failing to infuse the first tranche of ₹350 crore, paying worker dues, and settling essential costs such as airport charges.
The court deemed liquidation as the only viable option to protect the interests of creditors and employees.
The Legacy of Jet Airways
The demise of Jet Airways comes as a significant loss for the Indian aviation industry. The airline played a pivotal role in connecting India to the world and provided employment to thousands of people. Its trajectory serves as a stark reminder of the challenges faced by the aviation industry, even for well-established carriers.
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