‘ }. Companies. Krishna Yadav 8 min read 7683 Nov 2024, 12:18 PM IST. Jet Airways, established by Naresh Goyal, declared bankruptcy in April 2019 and halted its flight operations because of financial issues. (Ramesh Pathania/Mint). Overview. The Supreme Court has ordered Jet Airways to be liquidated after determining that the Jalan-Kalrock consortium, which won the bidding to revive the airline, failed to implement its bankruptcy resolution plan. This decision marks the end of a turbulent period for what was once the top airline in India. The ruling has sparked discussions among bankruptcy experts about the need to reform India’s insolvency system. Despite a successful bid from the consortium to rescue the airline, a prolonged dispute between Jet’s lenders and the winning group was dragged through various bankruptcy courts and the Supreme Court for years. Justice J.B. Pardiwala, who delivered the verdict, noted that this case highlights significant issues with the functioning of insolvency tribunals and the effectiveness of India’s Insolvency and Bankruptcy Code. The liquidation of Jet Airways raises important concerns regarding how well the current IBC framework addresses airline insolvencies. Go First airline has also requested liquidation, raising worries regarding the effectiveness of airline restructurings under the IBC. “Insolvencies in the airline industry present distinct challenges, and strategies that succeed in other sectors may not be suitable for airlines,” stated Vihang Virkar, partner at DMD Advocates. “In India, airlines usually do not own a significant portion of their fleet, as most ownership rests with the aircraft lessors.” Thus, the only valuable assets an airline possesses are its landing and parking rights, slots, personnel, and low-value ground-handling and engineering equipment, he continued. “None of these can be quickly turned into cash during a liquidation.”
