All over for Jet Airways

THE prolonged ordeal of Jet Airways’ creditors, employees and other stakeholders is set to end as the Supreme Court has ordered the liquidation of the grounded air carrier’s assets. The court set aside the contentious decision of the National Company Law Appellate Tribunal (NCLAT), which had upheld the resolution plan and approved the transfer of the airline’s ownership to the winning bidder, Jalan Kalrock Consortium. The latter’s failure to meet its financial obligations, which included pumping Rs 350 crore into the moribund airline and paying Rs 226 crore in employee salaries, sounded the death knell for Jet Airways. The revival plan never took off in the absence of requisite funding.

After GoFirst, Jet has become the second major airline in India to be liquidated under the Insolvency and Bankruptcy Code (IBC). This is disheartening news for the country that prides itself on having the third-largest domestic aviation market in the world, after the US and China. The shrinking number of players in the civil aviation sector is a matter of concern. Timely course correction is a must to pull financially stressed airlines back from the brink.

The court has rightly highlighted the need for stricter adherence to the IBC, which was enacted in 2016 by the Union Government as an “effective deterrent against unscrupulous borrowers”. The most important lesson from the Jet fiasco is that insolvency resolution should be done in a time-bound manner so that lenders don’t have to wait for years for loan recovery. The decisions of appellate bodies such as the NCLAT should be marked by consistency as well as transparency. Defaulting bidders who try to pass the buck must be taken to task. The long-term success of the government’s regional air connectivity scheme, UDAN (Ude Desh ka Aam Nagrik), hinges on giving ailing airlines a new lease of life.