resr 5paisa Research Team 27th December 2022

Why Jet Airways' revival is taking more time than anticipated

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Will it fly or will it not? Uncertainties around Jet Airways remain as the beleaguered airline, once India’s biggest, is looking to once again take to the skies.

This, after a few executives at the carrier resigned due to the uncertainties surrounding the launch of Jet 2.0, according to a report by Mint newspaper. 

Citing unnamed executives at Jet, Mint said that Nakul Tuteja, who joined 10 months ago as vice president, human resources and administration, resigned recently. An HR industry veteran of 25 years, Tuteja joined the airline in February. He had stints in GoAir, IndiGo, Aman Resorts, Infosys BPM, EXL and IBM (Daksh), the report added.

Besides, six cabin crew and one pilot have left the airline, leaving the airline with four pilots and 16 cabin members, the report said. 

H.R. Jagannath, vice president, engineering, Jet, has also moved on after his six-month contract ended with the company in November.

But what exactly is leading to these exits?

Exits increased since the Jalan-Kalrock consortium, which won the bid to acquire Jet from its lenders, announced temporary cost-cutting measures last month, the report said. 

What cost cutting measures is the new management undertaking?

On 18 November, Jet’s winning bidder said it was restructuring salaries to increase cash flows amid a protracted legal battle which is threatening to delay the resumption of operations of the grounded carrier.

Currently, Jet Airways has 210 employees, down from 230 until two months back.

What is the status on the resolution plan?

The consortium has deposited Rs 150 crore required under the court-approved resolution plan with the lenders, and the remaining sum will be infused after the NCLT’s terms are fulfilled in terms of handing over the company, the Jalan-Kalrock consortium said in a statement.

On 21 December, the National Company Law Tribunal (NCLT) reserved its order in a petition filed by the Jalan-Kalrock consortium claiming to have completed all conditions precedent required under its resolution plan. It also sought transfer of ownership of Jet Airways. However, the airline’s lenders say that the consortium has still not satisfied all the conditions.

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