The Jet Airways case has takeaways for the bankruptcy code as well as for other airlines. Comment.
Published: June 20, 2019
It has been two months since Jet has stopped all flight operations. The lenders to the Jet Airways have finally decided to take it to the National Company Law Tribunal and start the insolvency proceedings in order to recover the money which was due to them. The lenders consortium has arrived at this decision after a lot of effort and forethought. The Insolvency and Bankruptcy Code was formed for helping businesses find a solution and bring it back to life through capital restructuring under a new promoter. The chances of the above are very slim in case of Jet. The lenders themselves will also share a fair share of the blame for delaying the insolvency process which has significantly eroded many assets of the company which comprise its goodwill, routes and landing slots, aircraft fleet, etc. The operational metrics of Jet Airways show that the airliner had posted consistent growth as per the revenue passenger kilometres and cargo tonnage till 2017-18. So the crash was not spurred by the lack of business but many issues which affected viability from the way aviation turbine fuel which is taxed and the airports charges. The airline carriers also should reappraise their pricing and not end up in the endless race market share and end up in the bottom.
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