Jet Airways was incorporated in 1992 as a private company under the Companies Act of India. It operated as an Air Taxi operator initially and grew to have over 120 aircraft and serve over 1,000 destinations (2). However, in 2019 it flew its last flight due to increasing financial crisis. Key reasons for its failure included a weakening rupee increasing costs, high debt from investments like Air Sahara that did not perform, and lack of strategic investment when needed (3). Its resolution process under IBC is ongoing, with the winning bidder working to relaunch the airline pending NCLT approval expected on February 22 (5).

1. BY: SOURAV
COMPANIES ACT
CASE STUDY
JET AIRWAYS

2. 1
INTRODUCTION
No company in India can violate the regulations of this Act.
Registration of all companies in India are undertaken by this
Act. If any company does not follow these rules and regulations,
it is prohibited to perform by law of India
An Act in which rules and regulations for maintaining the books
of accounts of a company are written.
It was enacted by the Parliament of India on January 18, 1956
and started on April 1, 1956

3. 2
Case – Jet Airways
They operated as an Air Taxi Operator on May 5, 1993 with a
fleet of four leased Boeing 737 aircraft.
Jet Airways was incorporated on April 1, 1992 as a private
company with limited liability under the Companies Act.
Jet Airways, based in Mumbai, started its operation in 1992.
The privately-owned carrier had 120 aircraft's and over 1,000
destinations to serve.
However, in April 2019, Jet Airways flew its last flight from
Amritsar to Mumbai.

4. 3
What actually happened
In 2006, they purchased Air Sahara with an investment of
$500 million - Cash
They re-branded the budget carrier as Jet Lite. But by 2015,
Jet Airways wrote off its entire investment.
As the financial crisis increased, it impacted traveler numbers
and led to low cost airliners dominating India’s skies.
One of the core reasons for Jet Airways failing is the
chairman’s management style.
Mr. Goyal should have had two separate management teams
to run the full service carrier and budget flyer.
The rupee was becoming weaker, the biggest cost for
airlines, oil, became very expensive for all airlines

5. 4
What actually happened
The chairman failed to attract any strategic investors to pitch in with
big amounts of money, and that lead to the organization facing a major
financial crisis
There was no investment made in Jet Airways – TATA refused
Etihad Airways had a 24% share of Jet Airways, and they refused to
increase the volume of their shares.
In the overall scenario, Jet Airways spent more -- much more than
what it was earning -- which resulted in the stacking of debt.
Jet was to be the first Indian airline and the first aviation sector case to
undergo restructuring under the Insolvency and Bankruptcy Code
(IBC).
The Jet Airways case was filed in the National Companies Law
Tribunal (NCLT) on 17 June 2019

6. 5
Judgements
Hopes of many of its employees had soared after the consortium of UAE-
based businessman Murari Lal Jalan and London's Kalrock Capital won the bid
for the airline.
The consortium had won the bid for Jet Airways in October 2020 and had
plans to re-launch the airline by the summer of 2021.
It was crucial to get the clearance from the National Company Law Tribunal
by January
In order to get slots for the summer schedule of airlines that is released by
regulator Directorate General of Civil Aviation, or DGCA.
But that timeline has been disrupted with multiple hearings and petitions.
The Mumbai bench of the NCLT will now give its order on February 22
whether or not to share the resolution plan of Jet Airways with its employees.

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