Jet Airways Insolvency and the Jalan-Kalrock Consortium: Why an Approved Resolution Plan Still Failed to Fly

Jet Airways (India) Limited was incorporated on April 1, 1992, and commenced operations as an air taxi operator on May 5, 1993, with a fleet of four leased Boeing 737-300 aircraft. It was founded by Naresh Goyal, a former travel agent who had operated as a general sales agent for international airlines in India since 1974 through his company Jet Air (Private) Limited. The airline began full scheduled operations in 1995 and launched its first international service in 2004 with a flight from Chennai to Colombo. It listed on the Bombay Stock Exchange on December 28, 2004.

At its peak, Jet Airways was India’s largest private airline by market share. It held a 21.2% passenger market share in February 2016. The airline operated over 300 flights daily to 74 destinations, flew to destinations across Europe, North America, Southeast Asia, and the Middle East, and had built a reputation for full-service quality that domestic competitors largely could not match. In 2007, it acquired Air Sahara for approximately Rs 1,450 crore and relaunched it as JetLite. Its workforce at the peak was approximately 16,000 to 23,000 employees across its operations.

The Structural Weaknesses Behind the Collapse

The collapse of Jet Airways was not sudden. It was the product of a decade of compounding structural weaknesses operating behind a credible consumer brand. The airline had accumulated significant debt through its expansion, fleet acquisition, and the Air Sahara acquisition. It operated in a market where low-cost carriers, particularly IndiGo (launched 2006) and SpiceJet, competed aggressively on price on domestic routes that formed the backbone of Jet’s network. Aviation fuel price volatility, a depreciating rupee that raised dollar-denominated leasing costs, and thin margins across the industry made the debt burden progressively harder to service.

By early 2019, Jet Airways owed approximately Rs 8,500 crore to a consortium of 26 banks led by the State Bank of India. It owed approximately Rs 3,000 crore to vendors, airport operators, and fuel companies. It owed unpaid salaries to its workforce. It had reduced its operational fleet from 119 aircraft to 35 as aircraft lessors repossessed planes for unpaid lease rentals. Daily operations had fallen from approximately 450 flights to around 150 flights.

On April 17, 2019, after lenders declined to provide the immediate funding needed to continue operations and after no strategic investor had committed to a rescue, Jet Airways suspended all operations. The final flight was flight 9W-2502 from Amritsar to Mumbai. The airline that had flown for 26 years, and that had been the airline of choice for millions of Indian travellers, had come to a full stop. A consortium of lenders, led by the State Bank of India, filed an insolvency petition with the National Company Law Tribunal on June 17, 2019. On June 20, 2019, the NCLT’s Mumbai Bench admitted the petition, initiating the Corporate Insolvency Resolution Process (CIRP) for Jet Airways (India) Limited. Ashish Chhawchharia was appointed as Interim Resolution Professional and subsequently confirmed as Resolution Professional.

The Corporate Insolvency Resolution Process for Jet Airways was one of the most complex CIRP proceedings in Indian insolvency history. The combination of cross-border assets, a large creditor pool, significant employee claims, the aviation-specific regulatory environment, and the unusual challenge of reviving an airline from zero operations rather than simply selling a going concern made it structurally distinct from most corporate insolvencies under the Insolvency and Bankruptcy Code, 2016 (IBC).

Claims Received and Admitted

The Resolution Professional received claims totalling Rs 24,887 crore across 16,643 claims. Of these, financial creditor claims of Rs 8,462 crore were received, of which Rs 7,807 crore was admitted. SBI’s admitted claim was the largest among financial creditors. Operational creditor claims (excluding employees and workmen) amounted to Rs 12,372 crore, all placed under verification. Workmen and employee claims totalled Rs 443 crore (also under verification), with 11,965 individual claims from authorised representatives. The admitted financial creditor claims figure of approximately Rs 7,807 crore was later referenced by the CoC as the baseline against which any resolution plan would be evaluated.

The Cross-Border Insolvency Dimension

Jet Airways had assets and liabilities in multiple jurisdictions. Aircraft were leased from lessors in Ireland, the United States, and other countries. The airline had a legal entity in the Netherlands that had been placed into liquidation proceedings there. This created a cross-border insolvency situation with no established statutory framework under Indian law at the time, since Part Z of the IBC dealing with cross-border insolvency had not yet been notified. The Resolution Professional and the Dutch administrator entered into a protocol for cooperation, which the NCLT approved, marking one of the first cross-border insolvency cooperation arrangements in India’s IBC history.

The Bidding Process and Selection of JKC

The Resolution Professional issued the first Expression of Interest (EoI) advertisement on July 20, 2019. Given the complexity of the case, the COVID-19 pandemic, extensions granted by the NCLT and NCLAT, and the challenges of attracting viable bidders for a grounded airline with no operational fleet, the bidding process was prolonged. The Jalan-Kalrock Consortium, led by UAE-based businessman Murari Lal Jalan and London-based Kalrock Capital (represented by Florian Fritsch), emerged as the successful resolution applicant. The Committee of Creditors (CoC), comprising the consortium of 26 lenders led by SBI, approved the JKC resolution plan through e-voting that concluded on October 17, 2020. JKC proposed to relaunch Jet Airways as a full-service carrier with an initial investment of approximately Rs 1,000 crore.

Understanding the composition of the Jalan-Kalrock Consortium (JKC) is essential to understanding why the resolution plan encountered the execution problems it did. The consortium was an unusual pairing of a UAE-based entrepreneur with no prior airline ownership experience and a London-based private equity and investment management firm.

Murari Lal Jalan is a UAE-based entrepreneur with business interests spanning real estate and other sectors. He had no prior experience in owning or operating a commercial airline. Kalrock Capital is a London-based investment management firm. The consortium positioned themselves as turnaround investors who would bring fresh capital and management focus to rebuild Jet Airways from the ground up. They proposed to relaunch the airline initially as a domestic full-service carrier and progressively expand internationally.

The absence of prior airline operating experience in the consortium’s leadership was noted by aviation analysts at the time of the CoC approval. Running an airline at scale in India requires navigating regulatory requirements, managing aircraft leasing relationships, obtaining and maintaining operating certificates, building slot portfolios, staffing and training thousands of employees, and sustaining operations through the inherently thin-margin, cash-flow-intensive dynamics of commercial aviation. These are not challenges that generalist investors typically encounter, and the JKC case would test whether the IBC framework had adequately screened for operational capability alongside financial capacity.

The NCLT Mumbai Bench, chaired by Mohammed Ajmal and V. Nallasenapathy, approved the JKC resolution plan on June 22, 2021, approximately two years after insolvency admission. The approval order set a 90-day implementation deadline starting from the date of approval, within which conditions precedent had to be fulfilled. A further extension of 180 days was permissible. This meant the implementation was expected to be substantially complete by approximately September 2021, with a hard outer limit of approximately March 2022.

Key Conditions Precedent in the Plan

Airport slots are time-specific permissions for an aircraft to land or take off at a congested airport. At major Indian airports including Mumbai and Delhi, slots are a scarce regulatory resource. Jet Airways, at the time of its April 2019 grounding, held a substantial portfolio of slots at these airports built up over 26 years of operations. These slots were the foundation of its network and a large part of its operational and commercial value.

When Jet Airways grounded operations, the DGCA temporarily reallocated these slots to other airlines to maintain service continuity at airports. Carriers including IndiGo, Air India, SpiceJet, and Vistara absorbed Jet’s former slots on their respective route networks. The question of what would happen to these slots when and if Jet relaunched was left unresolved.

The Historicity Principle and Why It Could Not Apply

International aviation slot allocation follows the “grandfather rights” or historicity principle: airlines that hold slots in one scheduling season generally retain them in the equivalent season of the following year, provided they use them for at least 80% of their allocated times (the “use it or lose it” rule). Jet Airways, having grounded for an indefinite period, could not satisfy any usage requirement and therefore could not invoke historicity to reclaim its former slots.

The JKC consortium had initially expected that slot restoration would be part of the NCLT-approved resolution plan. The NCLT’s June 22, 2021 order, however, explicitly declined to give any direction on slot historicity, noting only that DGCA had stated it could not reallocate slots from airlines currently using them without a valid regulatory basis, and that the new management of Jet Airways would have to apply for slots through the standard process like any new or resuming operator.

The DGCA’s position was legally defensible and commercially reasonable from the perspective of the incumbent airlines using the slots. DGCA cannot arbitrarily cancel validly held slots from operational airlines without regulatory justification. The absence of a clear statutory provision in the IBC for handling sector-specific regulatory assets in airline insolvencies meant that one of the most valuable assets in the resolution plan simply fell outside the IBC framework entirely. This was a structural gap in the law, not a regulatory failure, but its practical effect on the JKC revival plan was severe.

An Air Operator Certificate (AOC) is the fundamental operating licence for a commercial airline in India, issued by the DGCA under Rule 133A of the Aircraft Rules, 1937. Without a valid AOC, no commercial flight can be operated. The AOC is typically valid for one year and requires continuous compliance with airworthiness, safety, and operational standards to maintain validity. An AOC cannot be granted to an airline that has no operational fleet, which creates a circular dependency for a grounded airline attempting to revive.

The AOC history for Jet Airways during the insolvency period illustrates the operational fragility of the revival attempt:

If the slot dispute was the structural barrier to the airline’s commercial future, the Rs 350 crore payment dispute was the legal and financial battlefield on which the insolvency case was ultimately decided. The payment was defined in the approved resolution plan as the first tranche of equity to be infused by JKC as a condition precedent for the formal transfer of ownership of Jet Airways from the lenders to JKC.

The lenders, led by SBI, took the position that JKC had to pay Rs 350 crore in cash by a stipulated deadline to trigger the ownership transfer. JKC, facing difficulty in assembling the full Rs 350 crore in cash, sought to adjust the Rs 150 crore Performance Bank Guarantee (PBG) it had submitted against this obligation. The lenders disputed this adjustment, arguing that the PBG was a separate security instrument whose purpose was to provide lenders with recourse in the event of plan non-implementation, and that it could not simultaneously serve as part of the equity infusion payment. The NCLAT allowed the PBG adjustment. The Supreme Court reversed this decision.

The Source of Funds Controversy

An additional dimension of the payment dispute was the question of the source of JKC’s funds. When JKC made its second payment of Rs 100 crore by September 30, 2023, lenders appearing through Additional Solicitor General N. Venkatraman at the NCLAT flagged that Rs 13 crore of the Rs 200 crore paid in cash had come from “other sources” rather than directly from JKC. This raised concerns about whether the equity infusion was genuinely from the resolution applicant’s own resources as required under the plan, or whether funds from Jet Airways’ own accounts or other related parties had been used to partly fund the payment. JKC’s counsel clarified that the majority was paid by Murari Lal Jalan directly and that a small portion from a related source. The dispute was not ultimately resolved on its merits before the matter reached the Supreme Court.

The three years between the NCLT’s June 22, 2021 plan approval and the Supreme Court’s November 7, 2024 liquidation order were spent almost entirely in litigation across multiple tribunals. The pattern of decisions and counter-decisions illustrates a systemic challenge in the IBC framework: once a resolution plan is approved but not implemented, the law provides limited clear guidance on consequences, creating space for indefinite procedural extensions.

The Supreme Court’s November 7, 2024 judgment in State Bank of India and Others vs. The Consortium of Mr. Murari Lal Jalan and Mr. Florian Fritsch and Another (Civil Appeal No. 5023-5024 of 2024) brought the five-year saga of Jet Airways’ attempted revival to its legal conclusion. The judgment is significant not only for what it decided about Jet Airways but for the broader principles it established regarding resolution plan implementation under the IBC.

JKC, appearing through Senior Advocate Gopal Sankaranarayanan, argued before the Supreme Court that the NCLAT had rendered a detailed judgment and that JKC had spent Rs 700 crore in its revival attempt. It maintained that it had met its obligations and accused the lenders of obstructing the ownership transfer. The Supreme Court was unmoved by these arguments, noting that regardless of expenditures claimed by JKC, the core obligation of the resolution plan, which was to implement it within the agreed timelines, had not been met. Non-compliance over five years was treated as a plan failure, not a temporary delay that could be remedied by further extensions.

The court’s use of Article 142 was itself notable. This constitutional provision is ordinarily reserved for situations where existing law does not provide an adequate remedy for complete justice. Its invocation in the Jet Airways case implicitly acknowledged that the IBC’s own provisions did not clearly mandate liquidation in this specific scenario and that the court had to resort to its extraordinary powers to prevent the insolvency process from being paralysed indefinitely by successive tribunal extensions and inter-party litigation.

The Jet Airways insolvency is a case study not just in the failure of a specific resolution plan, but in the structural gaps of the IBC when applied to complex, regulated industries. The lessons are analytical rather than critical: the IBC was a landmark piece of legislation that transformed India’s insolvency landscape. But the Jet Airways case exposed limitations that warrant careful consideration.

Disclaimer: This article is for informational and educational purposes only and is current as of June 12, 2026. All dates, case references, and procedural facts are sourced from official NCLT, NCLAT and Supreme Court orders, IBBI order records, official company filings by Jet Airways (India) Limited, and official DGCA communications as reported in official sources. The Supreme Court case citation is Civil Appeal No. 5023-5024 of 2024 (State Bank of India and Others vs. The Consortium of Mr. Murari Lal Jalan and Mr. Florian Fritsch and Another). Claims data is from the Resolution Professional’s public statement dated July 2019. This article does not constitute legal advice. fiscalzenith.com accepts no liability for decisions made in reliance on this article.