Jet Airways fell victim to a cut-throat price war initiated by a slew of budget carriers and eventually defaulted to banks, staff and lessor
The insolvency administrator of Indian carrier Jet Airways is seeking resolution proposals for the grounded airline in a move that may give hope to creditors including State Bank of India.
Any expression of interest has to be submitted by August 3, Ashish Chhawchharia, resolution professional, said in a notice published in the Economic Times newspaper on Saturday. The final list of prospective applicants will be issued on August 14 and the resolution plans have to be submitted by September 5, it said.
The step to seek resolution proposals may give creditors a chance to recover some of their dues. Last month the National Company Law Tribunal agreed to hear an insolvency case and once Jet Airways is declared bankrupt the chances of any meaningful recovery by the banks diminish.
The carrier, once the nation’s biggest by market value, hasn’t flown since April after running out of cash. Jet Airways, which successfully took on the monopoly of state-run Air India Ltd. in the early 1990s, fell victim to a cut-throat price war initiated by a slew of budget carriers and eventually defaulted to banks, staff and lessors.
Almost 17,000 creditors of the carrier, including its former chief executive officer, have claimed 248.9 billion rupees ($3.6 billion) in dues.
Most of Jet’s employees, including the chief executive officer and the chief financial officer, and hundreds of pilots and crew, have already left the company. Abu Dhabi’s Etihad Airways owns 24% of the carrier.
Banks have held talks with several potential investors, from Etihad Airways PJSC to Indian conglomerate Tata Group, without any success. Etihad was the only bidder in an auction process, but its offer was conditional on another investor pumping in most of the required cash. Some of Etihad’s conditions can only be met through a bankruptcy process, by allowing it to sidestep certain securities regulations, the lenders have said.