Jet Airways (JAI, Mumbai International) has confirmed a delay in its planned relaunch, which had been scheduled for this month, with sources telling India’s Economic Times newspaper on September 19 that the reasons for this are twofold.
As previously reported, the airline’s new owners, the Jalan-Kalrock consortium, is still trying to obtain a no-objection certificate from its former financing banks, which will free the restarting carrier to buy or lease aircraft. This requires a settling of outstanding debts. The consortium has reportedly offered the lenders INR3.8 billion rupees (USD47.7 million) in instalments and a 9.5% stake in the airline.
However, a new bottleneck has emerged, as Jet Airways has been pressing two competing engine makers, Pratt & Whitney and CFM International, to bear a larger share of the costs whenever an engine is replaced, the anonymous insiders said. These talks to reach more favourable terms in its proposed leasing contracts are so far unresolved. According to one of the newspaper’s sources, new engines like Pratt & Whitney’s GTF and CFM’s Leap need frequent maintenance in environmentally harsh conditions like India.
Jet Airways’ chief executive, Sanjiv Kapoor, confirmed the talks with the engine makers, explaining: “Starting or restarting an airline is a complex business and we want to be sure we take the time to get the best possible terms and contracts for both aircraft and engines, including maintenance contracts, as well as to receive aircraft configured the way we want them, to meet our strategic requirements and to secure our future.”
He added: “If that takes a little more time to get right, that’s fine. As the saying goes, ‘Act in haste, repent at leisure’.”
The airline is close to finalising its initial fleet plan to restart operations in the coming weeks, Kapoor said. “This is a marathon, not a sprint. We will start operations in a planned and phased manner and will share details of our fleet, customer value proposition, and business model when we open for sale.”
A source commented that the airline is close to finalising a contract to lease Airbus A320 Family aircraft, confirming earlier reports and adding that one of the twinjets was previously leased by Russian carrier S7 Airlines.
Jet Airways ceased operations in 2019 amid severe financial turbulence, and the consortium is now reviving the airline under India’s Insolvency and Bankruptcy Code.
