Frustrated over the delay in the transfer of three Boeing 777 aircraft operated by long-grounded Jet Airways, Malta-based Challenge Group is considering walking away from the deal. The company also said it would want the $5.6 million deposited by it to be returned with interest.
Challenge Group is the parent firm of Malta-based Ace Aviation.
Two years after the company signed the deal with the monitoring committee of Jet Airways to take possession of the three aircraft based in Mumbai, there has been no headway. This is despite orders from three courts, including the Supreme Court, to hand over the possession of the planes to the Challenge Group.
“Our $5.6 million sit with Jet Airways whilst the monitoring committee continues to ignore the court order to expedite the sale,” Michael Koish, chief investment officer, Challenge Group, told FE.
“We have now decided enough is enough. If the monitoring committee including the lenders and JKC (Jalan Kalrock Consortium) continue to procrastinate, we would sadly walk away from this deal and take our $5.6 million back with full interest,” he added.
The JKC consortium is the successful applicant for the bankrupt Jet Airways, but the handover of the airline by the lenders to it is yet to happen due to opposition of the lenders over some payment issues. However, these aircraft were not part of the revival plan.
The Challenge Group would have acquired them and put them in operation elsewhere. The Malta-based company had paid $4.6 million (10% of the total deal size) for the three planes in Mumbai and $1 million as part of the bid process for two such planes stationed in Delhi. The company has filed an appeal in the National Company Law Tribunal (NCLT), which has directed the monitoring committee to file a response to the plea on May 17.
“If JKC had given its go-ahead, this sale process would have closed long ago. The India courts took their time but eventually they delivered judgments correctly,” said a lawyer tracking the Jet Airways case closely.
Source said JKC does not have any intention to keep the Jet aircraft inventory with itself, including the 777s that have been sold to Challenge Group.
The Mumbai aircraft are now in a far worse technical condition than they were when the bidding started for them. To make them airworthy again would be time-consuming and involve high costs.
“They have now been grounded and not properly preserved for five years. India generally, and Mumbai in particular, are considered bad places for storing idle aircraft and engines because of the extreme levels of humidity and pollution in the air there,” Koish added.