Two senior executives of the difficulty Group, which recently received court authority to acquire three wide-body aircraft of grounded Jet Airways after a wait of more than a year, stated that acquiring grounded aircraft in India remained a substantial difficulty.
Unfortunately, two years have passed already. It’s a drawn-out procedure that has presented us with a lot of challenges because of legal disputes and disagreements between the lenders and Jalan Group about some aspects. We simply perceive that we are hurting since it puts our plan to convert those aircraft at danger. According to Challenges Airlines CEO Eshel Heffetz, “Maybe we need to take a step back and go take something else from the market for those assets that are still available.”
The airline’s monitoring committee held an auction in 2022, and the freighter aircraft operator was among the bids for Jet’s three Boeing B777-300 ER aircraft.
However, a legal battle between the lenders and the successful bidder, the Jalan-Kalrock consortium, blocked the ownership transfer of the airline, putting the deal’s completion on hold. The National Company Law Tribunal, however, provided the company with respite last month when it mandated that the monitoring committee begin the process of selling the three aircraft to Ace Aviation, the Challenge Group’s special purpose aircraft that had placed the winning offer.
Eleven Jet Airways aircraft, comprising three B737-800s, three Airbus A330-200s, and five Boeing B777-300 ERs, were attempted to be sold in 2022. But given the inadequate upkeep of the aircraft that has been grounded since April 2019, interest was minimal.
“Last year, we had five more aircraft up for sale alongside the B777, and there was very little demand for those assets in the market. Perhaps it didn’t meet the monitoring committee’s standards, as the planes are still on the ground. To activate them in the future, you will need to make an investment. You will be left with nothing if you choose not to do it. It’s merely metal that has rusted,” Heffetz remarked.
The company has committed to purchasing the three aircraft for about ₹400 crore, but it faces additional challenges because it will take eight to twelve months for the aircraft—which has been grounded for more than four years—to become airworthy and be able to take off from India. The business stated that converting the passenger planes to freighters will require more time.
The longer you wait or the longer the airplane is grounded, the more value it loses until finally the assets have no worth at all, or sometimes even less. Challenge Airlines’ chief investment officer, Michael Koish, stated, “We think those three assets were almost there if the court would have theoretically decided differently or would have thought of waiting a little bit longer.”
Source- Livemint
