Mint Explainer: The Cape Town connection to the Jet Airways, Go First insolvencies

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Subscribe to enjoy similar stories. The failure to revive two prominent Indian airlines—Jet Airways and Go First—has triggered a debate on the limitations of India’s Insolvency and Bankruptcy Code (IBC), particularly in addressing airline insolvencies. Jet Airways and Go First have now become case studies shedding light on the difficulties in reviving airlines under the IBC.

Mint explains what went wrong in these case. Jet Airways, once a flagship airline in India, spiralled into insolvency in June 2019 after defaulting on over ₹8,000 crore owed to its creditors, chiefly State Bank of India (SBI). Despite being a major player in the Indian aviation market, Jet faced mounting operational inefficiencies, excessive debt, and stiff competition, leading to its downfall.

In 2021, the Jalan-Kalrock Consortium (JKC), led by UAE-based Murari Lal Jalan and Florian Fritsch of Kalrock Capital Partners, won the bid to revive Jet Airways with a resolution plan worth ₹4,783 crore. Of this amount, ₹475 crore was allocated to settling outstanding debt to creditors. However, the revival plan quickly became mired in an ugly legal dispute between JKC and the lenders.

While JKC claimed ownership of the airline and stated it was doing everything possible to restart operations, the consortium accused the lenders of intentionally stalling efforts and pushing the airline closer to liquidation. A major stumbling block was JKC’s failure to fulfil key financial obligations outlined in its resolution plan. The consortium was supposed to make an initial payment of ₹350 crore to creditors but only deposited ₹200 crore.