Jet Airways founder Naresh Goyal

Jet Airways and its founder Naresh Goyal 

Jet Airways, once India’s largest private airline, has been mired in a long and complex insolvency process since it stopped flying in April 2019 due to financial troubles. The airline owes over ₹8,000 crore to its lenders, who have been trying to recover their dues through various legal avenues. However, the resolution plan approved by the National Company Law Tribunal (NCLT) in June 2021, which would see a consortium of Jalan-Kalrock take over the airline and inject $1.3 billion into it, has faced several hurdles and challenges.

One of the major obstacles is the arrest of Jet Airways founder Naresh Goyal by the Enforcement Directorate (ED) on September 1, 2021, in connection with a money laundering case involving a ₹538 crore bank fraud. The ED has alleged that Goyal and his wife Anita Goyal diverted funds from Jet Airways to their personal accounts and to companies and trusts in tax havens. The ED has also accused Goyal of loan evergreening, which means taking new loans to repay old ones, thereby inflating the debt of the airline.

Goyal, who started Jet Airways in 1993 and made it a successful brand in the domestic and international markets, has denied any wrongdoing and has challenged his arrest in the Bombay High Court. He has also sought bail on medical grounds, citing his age and health issues. However, the court has not granted him any relief so far and has remanded him to judicial custody till September 29.

The arrest of Goyal has cast a shadow over the revival of Jet Airways, as it may affect the transfer of ownership and assets to the Jalan-Kalrock consortium. The consortium has also not been able to meet its funds infusion target and has sought repeated extensions from the tribunals. Moreover, the Directorate General of Civil Aviation (DGCA) has not renewed Jet Airways’ Air Operator’s Certificate (AOC), which is required for operating flights. The AOC expired in May 2021 and the DGCA has said that it will consider renewing it only after the consortium fulfills certain conditions.

The creditors of Jet Airways have expressed their dissatisfaction with the Jalan-Kalrock resolution plan and have told the Supreme Court that it is not workable. They have called for the airline to be wound up and liquidated, as they fear that they will not be able to recover their dues otherwise. The Supreme Court has asked the consortium to respond to the allegations made by the creditors and has listed the next hearing in two weeks.

The fate of Jet Airways and its founder Naresh Goyal hangs in balance as they face multiple legal battles and uncertainties. The once-prominent airline is struggling to make a comeback in a competitive and dynamic aviation sector, while its founder is fighting to prove his innocence and secure his freedom.