India’s Supreme Court has ordered the liquidation of Jet Airways due to the failure of the Jalan Kalrock Consortium (JKC) to comply with the approved resolution plan by the National Company Law Tribunal (NCLT).
This ruling, issued on November 7, 2024, marks the end of a protracted struggle involving unfulfilled promises and unsuccessful attempts to revive the airline, which ceased operations in 2019.
The NCLT had previously approved JKC’s acquisition of Jet Airways in 2021, requiring payments of INR3.5bn (€38m) to creditors and INR2.26bn (€25m) to employees, which JKC did not make on schedule.
The Supreme Court’s decision was prompted by an appeal from lending banks challenging modifications made by the National Company Appellate Law Tribunal, leading to the forfeiture of INR2bn (€22m) already paid by JKC, and calling for the appointment of a liquidator by the NCLT.
Jet Airways once flew a fleet of 78 aircraft and held 21pc of the Indian market but was burdened by €1bn in debt and faced challenges such as price competition, rupee depreciation, and high oil costs, leading to aircraft grounding in early 2019 and incurring creditor debts including lessors and banks.
Major Irish aircraft lessors, including AerCap, Avolon, and BOC Aviation, initiated requests for the de-registration of 18 planes and raised concerns over India’s bankruptcy regulations impacting their assets.
India’s bankruptcy rules offer 330 days for resolution, but lease agreements are contested under local law, challenging international treaties like the Cape Town Convention, leading to warnings from lessors regarding the implications for the Indian aviation market.
India is deemed a critical leasing market with significant sale-and-leaseback transactions; however, rising lease rates and legal uncertainties have made lessors cautious, with recent bankruptcy pressures on airlines like Go First and SpiceJet also affecting the sector’s confidence.
