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The Supreme Court on Thursday exercised its extraordinary constitutional powers to order the liquidation of the troubled private air carrier, Jet Airways.
Launched in 1992, Jet Airways grew to be one of the biggest carriers in the country, reigning the sector with a 22.6 per cent passenger market share back in 2010. In its heyday, it operated from its primary hub, Mumbai, and secondary hubs in Chennai, New Delhi, Bengaluru, Kochi, and Kolkata, with more than 300 flights.
However, when SpiceJet and IndiGo entered the market and the subsequent tumbling of ticket fares in the mid-2010s, it went into deep financial losses. In October 2017, IndiGo overtook it as the market leader. By 2019, it announced bankruptcy, ceasing operations by April of that year.
On November 7, 2024, the SC bench comprising Chief Justice DY Chandrachud, Justice JB Pardiwala and Justice Manoj Misra set aside an order by the National Company Law Appellate Tribunal (NCLAT) that earlier decided the fate of the carrier.
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By ordering the liquidation, the apex court has struck down the NCLAT decision approving the transfer of its ownership to Jalan Kalrock Consortium (JKC).
The bench criticised the NCLAT decision, much like what happened in the Byju’s insolvency order, and said that Jet Airways’ liquidation was in the interest of creditors, workers and other stakeholders.
The air carrier suffered its first-ever loss in FY2001-2002 but quickly recovered when the central government allowed private operators to fly internationally in certain parts of South Asia. Jet’s first international flight was to Colombo from Chennai in March 2004.
Jet was also one of the major private players to capitalise on the grounding of Kingfisher Airlines, when it began offering business-class tickets under its Jet Konnect brand in 2012. However, these, along with the 2013 decision by Etihad Airways to buy a stake in the company, could not prepare Jet Airways for what was in store for it.
By late 2013, Jet Airways went into an all-out fare war with IndiGo and SpiceJet. At one point, overall fares even tanked to just Rs 1200 in some sectors. In 2014, Jet realised that it was biting a bit more than it could chew and announced the phase-out of Jet Konnect. With its brand merging into the carrier, Jet Airways became the third full-service airline after Air India and Vistara.
From there, began a period of dwindling profits to even a negative outlook by 2018. In April 2019, Indian Oil stopped the supply of fuel over non-payment of dues, grounding the airline fleet. By June 2019, lenders approached the NCLT for bankruptcy proceedings after striking down unfavourable offers from Etihad Airways and Hinduja Group.
Fast forward to 2020, Kalrock, the asset management firm under Fritsch Group, along with businessman Murari Lal Jalan (together, the JKC) purchased Jet Airways in a bid to restart operations. But it remained a dream that never took flight.
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