How relieved are you? It has been a journey in the past getting all the bidders, getting the bids, finalising them, and getting an approval.
Ashish Chhawchharia: It is certainly a big relief and a moment of satisfaction for all of us who have worked on the Jet team – my legal counsel, the banks – all of us who have worked together for the last two years unrelentlessly to make this happen. It is very pleasing indeed to get the approval from honourable NCLT and this will hopefully set the path now for the revival of Jet Airways and we can make it fly again.
How do you see Jet Airways flying from here? In what time can we see the first flight taking off? Give us some sense of the revival plan.
Rajesh Prasad: I am very happy that Ashish just spoke prior to me because I think as a team, we worked so hard with all the other stakeholders to see this day and thankfully I would say that the fatigue factor did not creep in. Although, it is two years two days when the order came from the time the matter was referred to NCLT. The end looks it is coming which is very gratifying. The plan has been approved which is a good thing. 90 days’ time limit to sort out quite a few matters looks very tight, but I am sure that the way the counsel argued there could be an extension of time that may go up to 180 days.
Now the issue before Jalan-Kalrock consortium would be to place the management, also to discuss with MOCA Civil Aviation regarding the slot matters to access the market. Although some preliminary work has happened for leasing of aircrafts, going ahead, finalising them, finalising the maintenance contracts, finalising the IT contracts and a whole lot of other things that go with it.
Thankfully there is one thing which is good. They had said that they will pick up at least 50 people from out of the novel idea that we promoted and experimented first time in the CIRP process of having an asset preservation team because the Kingfisher memory was very recent for us; that the assets are fast deteriorating assets. They have a shelf life, so we needed people to do the asset preservation and this experimentation proved success that we could retain value in those 12 aircrafts, the inventories and other items also that Jet owned because most of these in aviation are basically leased out things.
To that extent, a very hectic 90 days. If we are not able to meet, 180 days. The other issue also is that although the slot allotment guidelines are dated 2013 and it is predating the IBC process. But nevertheless, we were expecting that historicity it would be recognised because the company was under moratorium. This is on the glimpse side of it, but then I would think that because they are regulators and the sector is suffering so much, they will definitely be more patronising and come forward to provide the slots.
Most of the other airports I am told that the slots are available. For Delhi-Bombay also I am sure we can work out something with the slot coordinator and have them in place. So, at the end of the day happy, mixed feeling, but more towards joy. Feeling happy for all the flying public who had tremendous support and goodwill for Jet Airways. Feeling good for the employees who still stuck around and we are grateful to all those employees. Of course, I joined in July 2018 at a very turbulent time and within five-six months we had to go under and then we had to work out on all a multiple-round resolution process and COVID compounded the problem.
But we felt that COVID is giving an increased opportunity under the NCLT umbrella because the cost base becomes very attractive and you virtually start on a clean slate with no legacy liabilities. These two things are so attractive and if we are able to do our thing smartly, Jet will fly and will fly successfully. That is my summing up on the entire opportunity that NCLT has given and this is the belief also that I have: it will fly and it will fly successfully.
How much of a dampener is the fact that the biggest asset Jet Airways had was the historical slots, not only domestic but international?
Ashish Chhawchharia: Let me try and unravel that a little bit. Yes, of course, it is a bit disappointing that the historic rights on the slots that Jet Airways was given was not allowed as per the order and of course we have to see the fine print when the order is released soon. But let me tell you that there is a lot of cooperation and discussions happening with the various airport authorities, the civil aviation ministry, and the DGCA. I am quite certain that we will be able to navigate through this and work in cooperation. Even for Delhi there is a runway coming up by next year, there will be a lot more slots.
Please do understand that the airports require airlines as much as the airlines require the airports. It is a mutual existence and a mutual benefit, where will airlines fly to. What will airports do without airlines flying in. So, there are a couple of constrained airports at the moment. India has got many new airports also coming up. Yes, Bombay and Delhi airports are very important gateways for Jet Airways because Jet had a large operation from both and a lot of business traffic emanates from here or gets routed from here.
The resolution applicant as well as us are working closely with the authorities and I can tell you that everywhere we have received welcome and cooperation. Of course, there are certain constraints one has to work with. I mean it is not that these were sitting idle because if that would be the case, you would have had the public which would be inconvenienced. When Jet Airways operations were suspended back in April 2019, there was a lot of shortage of flights and the airfares had gone up temporarily. So, the ministry stepped in and rightfully allocated the slots temporarily to other airlines who had committed to putting aircrafts for that.
Now, we may not get the exact same slots, there might be some slots available in adjacent timing. So, it is not that that is the only thing that is available. I am quite hopeful and positive this 90-day timeframe set out by honourable NCLT as well puts a kind of urgency for everyone to act and in so many meetings and discussions I have had with the ministry officials, I am quite thankful for the cooperation and the approach that they have shown.
What all will the new Jet Airways do that will be different from the old Jet Airways? And what is the DNA of Jet Airways that will be carried forward?
Rajesh Prasad: First of all we have to get back the brand that Jet was known for. This is the first thing I think we have to keep in the back of our mind. There was so much love and affection for the airlines so we have to be very careful and sensitive about getting back the brand value by the quality of service that we were offering. Everybody used to say that it is not only is the best flying airlines in the country, but amongst the best in the world; comparing very favourably with Singapore Airlines or even Emirates.
Jet was known for hospitality. Jet’s hospitality was very well known amongst the flying public. To tell you also, we have not seen the fine prints of it, but we still have under the frequent flier program almost 10 million loyal members. We will see how Jet 2.0 can work that to the advantage. The next thing would be that one has to be very smart in doing the contracts and finalising them because nobody can afford to be lax on that. One has to be very wary about where every penny is going and from where it is earning.
It is good that the Jalan-KalRock Consortium is starting with a mix of domestic and international. If international is there, you may be aware that almost 60-65% of the payments liabilities and everything are denominated in US dollars, including the fuel prices. The moment you do actively a mix which is going towards or slanting towards international operations, then you start getting a natural hedge also. That again we have to work through.
Then you have the other things I said, about rebuilding the brand and hospitality. I have said that we have to keep a tab on the cost base and work on what is called in technical terms the differential between revenue per flying kilometres to the cost per flying kilometre. If we see independently the cost base or the revenue base, it does not make sense because the delta is what you would try and optimise and maximise.
There is one more thing that I would really sincerely believe. With so much mortality in aviation, we start looking at not trying to do something which will keep on eating into the bottom line because at the end of the day how do we build a sustainable business model where it should be intrinsically profitable. That is what the third DNA and Jalan-KalRock Consortium is very conscious about. They have been emphatic that they will attach due importance to this because at the end of the day being a commercial entity, one has to look at the bottom line.
These things would characterise the DNA of Jet 2.0. One more thing I would like to add is that low service carriers are doing very well, particularly led by Indigo. The differential that you get on doing the other classes like business and premiere economy, whether it is commensurate to the additional incremental cost that you are incurring, that also Jalan-KalRock Consortium is conscious about and they are keeping a tab on that aspect also; that is a very critical thing.
