While reviving India’s former full-service airline Jet Airways was always going to be an uphill task—with some even labeling it an exercise in futility—the recent order by the country’s Supreme Court brought the curtain down on it.

There will be no more attempts to rescue the airline, which ceased operations in 2019, and India’s apex court has ordered the liquidation of its assets.

Jet Airways stares at liquidation

India’s Supreme Court has ordered the liquidation of India’s former full-service private carrier, Jet Airways. The airline was in a long and sluggish process of being revived, but given that no substantial steps had been taken in that direction in such a long time, the court decided that liquidating its assets was the best way to compensate the airline’s creditors and employees.

The Jalan-Kalrock Consortium (JKC) had emerged as the winning bidder to revive Jet. It came together after Murari Jalan, an NRI based in the UAE, and Florian Fritsch, a Jet shareholder via an offshore holding company called Kalrock Capital Partners Limited, joined forces.

The Supreme Court observed that the resolution plan proposed by JKC was not being implemented properly, and a bench led by Chief Justice DY Chandrachud and Justices JB Pardiwala, and Manoj Misra commented,

“Liquidation must be available to lenders as a last resort… since resolution plan is no longer capable of implementation.”

Earlier this year, the National Company Law Appellate Tribunal (NCLAT) decided in favor of continuing with the resolution plan, paving the way for JKC to take ownership of the airline. However, creditors, including some of the biggest banks in the country, such as the SBI and Punjab National Bank, strongly opposed the move because the winning bidders had not met several financial obligations. The current ruling by the Supreme Court, however, is decisive.

Highs and lows

Jet Airways was one of the most successful private enterprises that emerged after the liberalization of India’s economy in the early 1990s. Over time, it became a premier airline in the country, favored by many, particularly those looking for other options than the state-run Indian Airlines and Air India.

Jet Airways’ ascent was a direct challenge to government carriers, which for decades held a monopoly on Indian aviation. Jet’s success in the 1990s and early 2000s was at a time when low-cost carriers hadn’t arrived in India, and expensive full-service airlines—out of reach for most Indians—were the norm.

Jet gradually grew its network and operations, even flying widebody jets, such as the Boeing 777 and Airbus A330s, to popular destinations, including New York and London. But once low-cost players like IndiGo and SpiceJet entered the market, Jet’s full-service model became increasingly difficult and costly to sustain.

Tough competition from budget carriers, along with some bad management decisions, eventually led to Jet’s dwindling finances, which were becoming increasingly burdened with mounting debt.

Things came to a head in April 2019 when the company suspended operations, with reports of its 777 aircraft being seized in Amsterdam just moments before its scheduled flight to Mumbai. What was once a beloved airline in the country, with many loyalists, ceased operations overnight.

End of the road

With India being the graveyard of many carriers and no successful examples of revival stories, getting Jet Airways back on its feet was always going to be difficult.

There were glimmers of hope, with the airline conducting certification flights and reviving its AOC. But the money owed to creditors, employees and customers was just too big for any reasonable compromise to be reached among the stakeholders.

The Supreme Court’s latest decision has brought finality to Jet Airways’ story, which has had its ups and downs. But now, sadly, it’s the end of the road for the carrier.