Bankrupt airline Jet Airways got a new lease of life recently after businessman Murari Lal Jalan and asset management company Kalrock Capital’s rescue bid for the airline was approved by creditors. The country’s oldest airline is hoping to resume operations after lack of funds forced its shutdown last year.
Jalan, a UAE-based businessman who started as a paper trader and later entered the real estate, mining, construction, FMCG, travel and tourism industry, is going to be the new owner of Jet Airways. Jalan is looking forward to relaunching airline operations but there are a few challenges that need to be tackled before Jet Airways can take to the skies again.
To begin with, the company will need to take the approval of the National Company Law Tribunal which is an organization that takes important decisions regarding the functioning of Indian companies. Jet Airways will also need the green light from the Ministry of Civil Aviation for slots and traffic rights.
The new investors will have to decide on how to best utilize the Rs 1,000 crore investment going forward as it will be a challenge for Jet Airways to repay its debt while ensuring a healthy cashflow. Additionally, the airline’s official approvals are also pending, and deals have to be negotiated with different vendors who will supply fuel, food and take care of the maintenance of the new aircraft.
The investors have planned to give the airline a small start, with only 12 aircraft under its ownership and in operation while the remaining aircraft stay under custody. While the airline will start its administration at a full scale, it is planning to operate only domestically for the time being. The aircraft in operation will be able to carry passengers for short periods of time – ranging from an hour to five hours – but the company plans to introduce new modern aircraft slowly and resume its international operations in the future.
While the revival plan for Jet Airways has been called solid, approved by a board of advisors, and given to an experienced board of management to execute, aviation industry experts say that Jet Airways will face a lot of issues starting with human resource management.
Jet Airways earlier employed more than 17,000 workers but given its state of affairs, it will have to let go of many of its employees and there is a certain level of uncertainty attached to it. The pandemic is another major challenge for the airline as the travel industry is already struggling because of COVID-19.
Most people prefer air travel compared to other forms of transport owing to a shorter commute and the presence of many safety precautions. However, the current mood in the country is not in favour of travel amid the raging pandemic, and this coupled with higher airfares are bound to make things difficult for a recuperating airline operator like Jet Airways.
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