The Supreme Court of India has officially ordered the liquidation of Jet Airways, ending years of failed revival attempts and marking a significant moment in the history of the Indian aviation sector
The Liquidation of Jet Airways
Jet Airways was once a major player in India’s aviation industry, commanding a significant share of the domestic and international market. The airline launched commercial operations in May of 1993. However, years of financial mismanagement, coupled with fierce competition and rising operational costs, left the airline struggling. By early 2019, Jet Airways could no longer sustain its operations, leading to grounded flights, stranded passengers, and unpaid employees. In April 2019, overwhelmed by debt and financial losses, the airline suspended its operations entirely.
The airline’s collapse affected thousands of employees and left creditors scrambling to recover their dues. Following its shutdown, Jet Airways entered insolvency proceedings under India’s Insolvency and Bankruptcy Code (IBC), marking the beginning of a lengthy and complex resolution process.
Jalan Kalrock Consortium and the Failed Revival Plan
The Supreme Court of India has ordered the liquidation of Jet Airways, concluding years of stalled revival efforts for the grounded airline. The decision, delivered on November 7, 2024, came after the Jalan Kalrock Consortium (JKC), which secured the airlines bid in 2021, failed to meet critical financial commitments outlined in its resolution plan. The State Bank of India stated that “the consortium had failed to meet the initial financial commitments required in the resolution plan”.
These obligations included injecting ₹350 crore into the company and clearing ₹226 crore in the overdue salaries, as well as obtaining regulatory clearances like an air operator certificate. Overturning an earlier NCLAT ruling, the Supreme Court emphasised strict compliance with the Insolvency and bankruptcy Code (IBC), directing the Mumbai NCLT to appoint a liquidator.
The ruling follows the recent liquidation of GoFirst, highlighting persistent challenges in India’s aviation sector and the complexity of corporate restructurings under the IBC. Justice Pardiwala from the Supreme Court said that this case was “an eye-opener” with numerous lessons for India’s IBC.
The liquidation of Jet Airways not only marks the end of an era but also raises critical questions about corporate restructuring in India’s aviation sector.
What does the liquidation of Jet Airways mean for India’s aviation industry and its approach to corporate restructuring? Comment your thoughts below
