Dispute With Jet Airways Stalls Ace Aviation's Initial Expansion Plans
The delay in finalising the sale of three Boeing 777-300 aircraft has stalled Ace's expansion plans by almost two years.
The Malta-based Challenge Group, the parent organisation of Ace Aviation, is facing hurdles in its two-year-old plan to expand its fleet due to a legal tussle with Jet Airways Ltd. over the sale of three Boeing 777-300 aircraft. The ongoing legal fight is consuming significant time, impacting the group's ability to move forward with its strategic plans.
The current situation is a bit strange, Michael Koish, chief investment officer of The Challenge Group, told NDTV Profit in an exclusive interview.
Ace Aviation is presenting its case before the National Company Law Tribunal bench in Mumbai, and the delay in finalising the sale has been almost two years. The case will come up for hearing on July 24.
Despite favourable orders from the appellate company law tribunal and the Supreme Court of India directing Jet Airways to proceed with the aircraft sale, Jet did not cooperate or initiate the required steps, according to Koish.
As a result, Ace Aviation returned to the Mumbai Tribunal.
They haven't cooperated, so we returned to the NCLT to proceed with these practical steps as per the Supreme Court's decision.Michael Koish, Chief Investment Officer, Challenge Group
Regarding the next steps, Koish expressed cautious optimism about cooperation from Jet Airways, noting the importance of acquiring passenger aircraft to expand their fleet. The airline intends to convert these aircraft into freighters, with conversion slots beginning in early 2025.
If Ace can't secure these 777s now, it'll have to look at other alternative opportunities. Its goal is to commence operations using converted 777s.
Koish also emphasised that this issue impacts the entire aviation market. Airlines and businesses are closely monitoring this case, given the interconnectedness of the aviation community, he said.
After incidents like Kingfisher's collapse, investors were hesitant to return to India. How this case is resolved will influence future investments in India. We hope the Indian market will not face a situation where investors don't trust it. We strongly believe in India and hope this case will be resolved positively.Michael Koish, Chief Investment Officer, Challenge Group
Jet Airways experienced turbulence and went bankrupt in 2019 due to financial difficulties. After the Murari Lal Jalan and Florian Fritsch consortium got the green light for a rescue plan in June 2021, ownership shifted to the Jalan-Kalrock Consortium following lengthy legal battles.
Despite NCLAT's approval of the plan, the case remains before the Supreme Court. A fate like this has been common for Indian aviation, with airlines like Go First, Kingfisher Airlines, and Air Sahara, among others.
