Just when it appeared as if Jet Airways was headed for liquidation, the lenders to the shuttered airline are seeking to extend the period for resolution by 90 days beyond the regular 330 days allowed under the regulations. This 330-day deadline has been specified by the RBI in the case of corporate insolvency resolution. Otherwise, the NCLT normally fixes 270 days for the resolution process to be completed. The Committee of Creditors (CoC) have been comforted by the fact that there is an order by the Supreme Court that permits extension of this deadline in exceptional cases. The CoC in the case of Jet airways feels the circumstances are indeed exceptional.
The coronavirus pandemic has left the airline industry all over the world in a serious crisis. Many top airlines are reporting billions of dollars in revenue loss due to either empty flights being operated or flights being cancelled completely. Many countries, including India have put an embargo on foreigners entering the country. The US government has said no to passengers from Europe. Under these circumstances, even if an airline company was keen to invest in Jet Airways, the current situation in the industry may not be conducive to do so.
This is the reason the CoC, in its meeting on Thursday, decided to go in for this 90-day extension. It will have to go to the National Company Law Tribunal (NCLT) with this request for extension.
The status in the case is there are at least two serious contenders if they could be described as such; one is the Russian government-backed fund, Far East Development Fund and the other, the Colombian Synergy Group. Though both may be genuinely interested, there are many issues associated with the process. The Synergy Group is reported to be insisting that some of the slots Jet Airways held in airports like London and Amsterdam be assured to them, but the CoC was in no position to give any guarantees to this effect.
Jet Airways suspended its operations almost a year back and the slots in these airports might have been allotted to some other airline.
It is not certain if the 90-day extension will give the CoC any opportunity to reach a resolution in the case.