India’s highest court has made a final decision to liquidate Jet Airways, a once-prominent airline that faced financial collapse in 2019 with a massive debt of $1.2 billion. The airline, which was the country’s second-largest at one point, ceased operations five years ago due to financial difficulties that led to bankruptcy proceedings initiated by lenders.
After a consortium of buyers, including businessman Murari Lal Jalan, was granted ownership of Jet Airways as part of the bankruptcy resolution process, concerns arose regarding the execution of the resolution process, leading to legal challenges from lenders. The Supreme Court of India recently overturned the ownership transfer, citing non-compliance with legal requirements by the consortium and deemed the buyout as legally unsustainable.
As a result, the court has ordered the commencement of liquidation proceedings by a bankruptcy court in Mumbai, which will involve the sale of the airline’s assets. India’s aviation industry, known for its fierce competition, has seen several airlines face financial troubles due to various factors such as mismanagement, excessive borrowing, and challenging market conditions.
In a separate incident, Go First, a budget airline in India, filed for bankruptcy protection last year attributing the grounding of half its fleet to engine issues from US aerospace company Pratt & Whitney. Another notable case was Kingfisher Airlines, which shut down in 2012 after defaulting on loans from state-owned banks worth millions of dollars. The airline’s owner, Vijay Mallya, fled India in 2016 and is currently facing extradition from London over financial fraud allegations in his home country.