When Jet Airways was sucked into a bankruptcy resolution process in June 2019 — just two months after it was forced to suspend operations because of unsustainable debt and mounting losses — there was a feeling that its collapse validated the popular theory that India simply did not have a viable market for a robust full-service airline. Vijay Mallya’s Kingfisher Airlines had flamed out in late 2012 after drowning in debt. State-owned Air India has been wallowing in losses for years and the move to privatize it seems to be going nowhere. The National Company Law Tribunal has now approved a resolution plan for Jet Airways put forth by the little-known Dubai-based entrepreneur, Murari Lal Jalan, and London-based Kalrock Capital, neither of whom has any aviation experience. The Jalan-Kalrock resolution plan is incredible. It promises to pay out just Rs 12 billion out of the Rs 155.25 billion, a little less than 8 per cent of the dues that the airline owes banks, financial institutions, operational creditors, employees and fliers who have been holding on to ticket refund stubs for well over two years. In effect, the new owners will ride into India’s aviation tarmac at an astonishingly lowball price.

The civil aviation ministry and the Directorate General of Civil Aviation — the regulator — seem to have deep misgivings about the rescue plan for Jet Airways. That is why they successfully contested before the NCLT the principle of historicity on the basis of which Jalan-Kalrock was trying to reclaim its rights to airport landing slots without which the airline cannot resume operations. The NCLT has given the new owners a 90-day time limit to seek approvals for the slot allocation with the possibility of extending that deadline. The Jet slots have already been farmed out to rival airlines. But even on the basis of historicity, the new owners cannot win back all the slots. The slot allocation guidelines of the International Air Transport Association, which member nations follow, lay down a narrowly-defined use-it-or-lose-it principle. Historic precedence can only be granted if the airline operated at least 80 per cent of the time in the previous equivalent season.

Many believe that Jet should be permitted to take off quickly. The resolution plan, which has not been revealed as yet, apparently builds a case for both domestic and international operations with narrow and wide-bodied aircraft. The plan is to refloat the airline by December. It will be easy enough to get planes on lease and rustle up employees; it will be harder to negotiate the contracts for maintenance, technical support and airport management. The biggest stumbling block will be winning back the slots in Level 3 airports like Delhi and Mumbai where demand usually exceeds supply. The pandemic has forced airlines to operate at 50 per cent of capacity but they are ready to ramp up as soon as the economy recovers. That is when the scramble for slots will become truly messy.