DGCA, aviation ministry refuse to give assurance on Jet Airways slots issue

NEW DELHI: Aviation regulator Directorate General of Civil Aviation (DGCA) and the Ministry of Civil Aviation (MoCA) have refused to give any assurance on Jet Airways’ slots issue, in an affidavit to NCLT.

In a joint affidavit to the Mumbai bench of the National Company Law Tribunal (NCLT), DGCA and MoCA stated that “slots allocated to the corporate debtor are not the asset of the corporate debtor and, hence, no mandatory directions in respect of the allocations/reallocation of slots may be issued by the tribunal for the mandatory compliance of the same by the DGCA/MoCA”.

However, any request of the resolution applicant (Jet Airways) for allocation of slots would be considered as per the existing policy and procedure, it added.

On the slots of the grounded airline prior to the Corporate Insolvency Resolution Process (CIRP), the affidavit stated that “allocation of traffic rights for such international air transport services among the airlines is made following due process…”

It added that these rights emanate from bilateral air service agreements and memorandum of understandings signed between India and respective foreign country on the principles of reciprocity and balance of benefits.

Thus, these rights cannot be owned by any airline but are national assets and scarce resource of the country, which have to be utilised with due care ensuring their optimal use at all times, in the interest of the nation, it noted.

“Thus, no airline can own these rights, nor can it claim the same as a matter of rights. The traffic rights are not the assets of the airline and, therefore, can’t be part of insolvency proceedings,” it added.

It said allocating slots to revived Jet Airways would not be an issue in view of upgradation of existing airports and construction of greenfeild (new) airports such as Jewar in Uttar Pradesh, Mopa in Goa and Navi Mumbai in the next few years, which will directly contribute to availability of additional slots.

“This capacity creation through new airports and expansion of capacity at existing airports will be helpful in allocating fair number of slots to resolution applicant (Kalrock-Jalan) by the competent authority,” it added.

Jet Airways on Tuesday requested the tribunal for permission to file an affidavit in response to DGCA/ MoCA affidavit.

Next hearing on Jet Airways is scheduled during the third week of March, by which time resolution applicant will file his affidavit and detail its position.

In January, the tribunal had issued a notice to DGCA and MoCA to clear their stance on Jet’s slots.

The ministry has temporarily given most of the slots of the Jet Airways to other domestic airlines after it ceased all operations in April 2019.

Ashish Chhawchharia, the resolution professional of the grounded airline, had told the bench that “slots are a vital part of the plan and it is important that DGCA and MoCA submit their stance on the same”.

In September 2020, during a hearing, representatives of DGCA and MoCA said the slots were allocated temporarily to other airlines.

In October 2020, the committee of creditors (CoC) of Jet Airways had approved the resolution plan submitted by the consortium of the UK’s Kalrock Capital and the UAE-based entrepreneur Murari Lal Jalan, under the insolvency resolution process.

The plan was approved after the conclusion of the e-voting on the proposal.

The carrier, which was admitted to the NCLT in June 2019, owes more than Rs 8,000 crore to banks, with public sector lenders having significant exposure.

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