New Delhi, December 16, 2024: After a delay of more than two years, three Boeing 777s, formerly owned by Jet Airways and lying at the Mumbai airport, may finally be transferred to Malta-based Challenge Group.
The airline’s senior executives, who spoke exclusively to FE, said that there is a positive approach from the lenders and the liquidator of erstwhile Jet Airways. The conclusion of this long-pending deal could be among the first of the several milestones in the liquidation process of Jet Airways.
On orders of the Supreme Court, the final week of November saw the National Company Law Tribunal (NCLT) appoint Satish Kumar Gupta as the liquidator of long-grounded Jet Airways, on the submission of State Bank of India, the lead lender to the airline.
Ace Aviation, an entity belonging to the Challenge Group, was declared the winning bidder in November 2022 for the three wide-body planes, after they were put up for auction by the now-dissolved monitoring committee, led by Ashish Chhawchharia. In addition to the three in Mumbai, the company had placed a bid for two more 777s based in Delhi.
Michael Koish, chief investment officer, Challenge Airlines, said, “We believe we are right now at the turning point. We have been pushing for this deal for almost three years. Now, with the liquidator’s involvement, we are optimistic that we will be able to complete the deal.”
The Challenge Group had paid $4.6 million for the planes in Mumbai, which was 10% of the total value of the $46-million deal. The company had put in $1 million as the token money for the two planes in Delhi, whose auction process never took place.
The Maltese company intends to convert these multi-seater passenger planes into cargo aircraft. It currently has a mix of Boeing 747 and Boeing 767 planes in its fleet. The 777s from Jet Airways were supposed to be among the first to join its fleet. However, since there was an unprecedented delay in the acquisition, the Challenge Group had to acquire another aircraft to meet the conversion slot, which changes the plane type.
As per industry estimates, the cost of converting a passenger plane the size of a Boeing 777 can range between $40 million and $45 million per aircraft. The cost of making a grounded plane becoming airworthy again could be $8-10 million per plane according to the reports published in financialexpress.com.
Eshel Heffetz, CEO, Challenge Airlines, said, “What was supposed to take 45 days, has taken over three years. The delays caused a huge problem for us. Not only did it lead to a significant deterioration in the condition of the assets, which means that the cost of reactivating them would be much higher than budgeted for, we had to find other solutions in the meantime that cost us additional money but remain committed to completing this deal.”
