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Jet Airways’ relaunch faces delays as airline fails to end standoff with engine makers and lenders

Jet Airways, under new owner Jalan-Kalrock Consortium, is facing delays in its relaunch scheduled for this month, The Economic Times reported on September 19, citing people with knowledge of the matter. The first standoff is over proposed leasing agreements between management and engine manufacturers. Jet wants engine makers Pratt & Whitney (P&W) or CFM to bear a larger share of the cost of each engine replacement, according to ET sources. The second blind spot is when Jet’s creditors seek to settle the charges before the airline buys or leases the planes. Lenders want the new owner to obtain a no-objection certificate before leasing or purchasing aircraft. The consortium offered lenders installments of Rs 380 crore and a 9.5 percent stake in the airline. “Starting or re-launching an airline is a complex business and we want to make sure we take the time to get the best possible terms and contracts for both the aircraft and the engines, including maintenance contracts, as well as getting the aircraft configured as they are we want to meet our strategic requirements and secure our future,” said Sanjiv Kapoor, Jet’s new CEO. “If it takes a little longer to get it done, that’s okay. As the saying goes, “Act in haste, repent in leisure”. Jet, which was launched in 1993, suspended operations in April 2019. It is now being revived by a consortium under the Insolvency and Bankruptcy Act. For the first time in the history of Indian aviation, an airline is being revived under its own name after being suspended for a long period.

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