The Chief Investment Officer of Challenge Group says subsidiary entity Ace Aviation has been forced to source an alternative aircraft to fill an early 2025 P2F conversion slot originally slated to be taken by one of three B777-300ERs formerly placed at Jet Airways (Mumbai International).
In comments made to the Business Standard outlet, CIO Michael Koish criticised the lack of cooperation from the Jalan Kalrock Consortium (JKC), the would-be new owners of Jet Airways, and the airline's lenders.
"We have secured several conversion slots starting the first quarter of 2025," Koish said. "We initially aimed to finalise the purchase of these Jet Airways aircraft by mid-2024 to meet this deadline. However, the lack of cooperation from the banks and JKC has delayed the deal significantly."
"We signed a letter of intent (LOI) and injected USD5.6 million into Jet account two years ago. Under the resolution plan, the deal was supposed to be closed within 45 days, yet two years have elapsed with no progress, and they keep dragging their feet."
Jet Airways ceased operations in 2019. In mid-2021, a resolution plan submitted by Murari Lal Jalan and Florian Fritsch of Kalrock Capital Partners Ltd was approved by India's specialist bankruptcy court, the National Company Law Tribunal (NCLT).
According to the plan agreed to by lenders, ownership of Jet Airways would transfer to JKC as long as it made good on a series of payments, which, according to the lenders, the consortium has failed to do. Consequently, the sale has become bogged down in litigation.
In 2022, various ACE Aviation Group entities - Ace Aviation VIII Limited, Ace Aviation IX Limited, and Ace Aviation X Limited, signed a deal with the Jet Airways monitoring committee overseeing the sale of Jet Airways to buy three parked B777s.
Despite having signed the LOI and received the deposit, in November 2022, the Jet Airways monitoring committee paused the sale process because not all members agreed to it - JKC objected to the disposal despite having previously supported it. The matter has been the subject of litigation ever since, with several courts ordering the handover of the aircraft. Despite these orders, Ace Aviation is yet to receive any of the aircraft.
“We have persistently pushed for progress, but they have not responded to our repeated requests to move forward with the transaction," Koish said about both the lenders and JKC. "To meet our first MRO slot, we have already procured another aircraft from the market. This process was smooth, taking just three-four months with minimal challenges. This illustrates how efficiently such acquisitions can proceed when all parties cooperate. For the second MRO slot later in 2025, we depend on closing this deal with Jet Airways."
"Despite our repeated requests, we have not been allowed to conduct a thorough inspection of the aircraft," he added. "A back-to-birth records inspection is vital, not only for us but also for Jet Airways, as it provides a clear picture of their asset’s condition. We offered to bear all costs for this inspection, yet they have refused without justification. Their refusal places us in a risky situation and delays the planning of necessary maintenance scope of work, which is needed to fix and maintain the aircraft that are currently not airworthy."
ch-aviation has contacted Ace Aviation for details of the replacement aircraft.
