Jet's resurrection crucial for everyone
It opens up opportunities for employees of the airline and for a market of India’s size, it is important to have more options in the sector
The news of NCLT approving the revival plan of Jet Airways is a welcome development for fliers as well as aviation sector professionals.
Jet’s brand equity has been well documented and is the primary reason why investors still see value in it despite the airline facing the prospect of losing some of its prized slots.
It opens up opportunities for employees of the beleaguered airline who are yet to find a job and for a market of India’s size, it is important to have more companies in the aviation sector.
The development has been greeted with enthusiasm on Dalal Street too with shares of Jet Airways extending their gains for the second day after the NCLT gave its nod to the Jalan Kalrock Consortium’s bid for the airline.
The stock jumped 4.98% to Rs 104.40 — its upper circuit limit — for the day on both BSE and NSE.
It has been a harrowing time for those who have been associated with the airline and this tribunal order is a sliver of hope for them. Currently, Jet has over 3,000 staff members and according to media reports, former employees are eager to get the airline up and running as soon as possible.
Jet owes more than Rs 8,000 crore to banks and is facing claims of Rs 24,887 crore from various creditors. The NCLT has admitted claims worth Rs 14,000 crore.
The Naresh Goyal-founded airline became a scheduled carrier in 1995 and was listed on the bourses in February 2005. The airline suspended operations over two years ago and the protracted recovery process had raised serious doubts over its survival.
A lot of work, though is still needed to be done and the first step should be to renew the operating permit.
Some other regulatory approvals and management decisions would also be needed to be taken quickly so that the airline’s recovery path is not hindered.