Jet Airways (JAI, Mumbai International) aims to relaunch commercial flight operations from September, sources have told the private news agency Indo-Asian News Service (IANS). But lenders led by the State Bank of India could push it into liquidation before it starts, according to a report in India’s Economic Times.

The carrier suspended operations in April 2019 amid severe financial turbulence, in particular its failure to pay for fuel and aircraft leases, but once it was recertified in May 2022 new owners - asset manager Kalrock Capital and businessman Murari Lal Jalan, collectively known as the Jalan Kalrock Consortium (JKC) - took over from a consortium of creditors. Since then, the new investors have stuck to a plan to relaunch operations in the third quarter of 2022.

Jet Airways now hopes to resume commercial operations in September with fresh funding of more than INR13 billion rupees (USD163 million) over the next couple of years, the sources close to the relaunch told IANS.

It is reportedly at an advanced stage in talks with lessors and manufacturers before finalising its choice of aircraft and fleet plans. It was reported last month that Jet Airways, previously mainly a Boeing customer, was close to selecting Airbus A320neo Family and A220 aircraft. One “high-level source” said it would not always be “a small or marginal airline but will grow-to-scale.”

On July 26, Jet Airways announced on Twitter that it was “inviting pilots who are current and type-rated on the A320 or B737NG or MAX aircraft to apply to join us in creating history as we prepare to relaunch India’s classiest airline.”

However, the airline could be pushed back into liquidation by lenders if the JKC refuses to distribute the proceeds from leased aircraft to the carrier’s former financing banks. Financial-sector sources told the Economic Times that the lease of its aircraft to Air Serbia (JU, Belgrade Nikola Tesla) had yielded about INR1.08 billion (USD13.8 million), although the amount is currently parked with the State Bank of India.

Despite a pledge to do so, the consortium has not yet paid creditors, the sources said, and a group of banks has warned it that they will apply for the liquidation of Jet Airways if funds for leases are not distributed to the verified creditors. The JKC has sought time until next week to make a decision. A resolution plan approved by the National Company Law Tribunal (NCLT) last year did not mention the distribution of any lease payments, resulting in the dispute.

Jet Airways and Air Serbia were both equity partners with Etihad Aviation Group under the Etihad Airways Partners alliance from October 2015 until it was disbanded in 2018 after several of its members declared bankruptcy. In 2016, for example, Air Serbia leased an A330-200 from Jet Airways for use on transatlantic flights. It remained in the Serbian flag carrier's fleet from May 2016 to April 2021 as YU-ARA (msn 885) and is now stored at Abu Dhabi International.