Malta’s Challenge Group May Scrap Deal For 3 Jet Airways Boeing 777-300ERs

It has now been more than five years (and a failed restart attempt) since Indian carrier Jet Airways ceased operations in April 2019. Its collapse prompted the grounding of its aircraft, with several still yet to find new homes. Three of the airline’s former Boeing 777 widebodies looked to have got a second life with a sale to the Challenge Group, but the Maltese winning bidder may now withdraw.

The story so far

The fate of Jet Airways’ Boeing 777s has hung in the balance for a considerable amount of time now, following disputes involving the Jalan-Kalrock Consortium. JKC won the bid to restart the airline’s operations, but has clashed heads with India’s National Company Law Tribunal (NCLT), which ruled that the 777s should be sold. Last December, another tribunal rejected JKC’s appeal against this decision.

As Simple Flying reported at the time, the dispute boiled down to ex-Jet Airways employees wanting to be paid pending dues, including gratuity and provident funds, first. However, with Maltese company Challenge Group, which won the bidding war for the Boeing 777-300ERs, already having paid a deposit of around $5 million, the wheels of the sale were already in motion, thus the path was cleared.

Photo: Fasttailwind | Shutterstock

Three months after the court order to proceed with the sale in December 2023, March 2024 saw the Challenge Group approach India’s National Company Law Appellate Tribunal (NCLAT) in order to expedite the process. By then, the Maltese company had already paid $6 million, and was ready to transfer the remaining $41 million upon the start of the sale. Michael Koish, its Chief Investment Officer, stated:

“We would like to close the aircraft deal in the coming six months, [but] we hope it will be even earlier than that, maybe in three to six months. We will have to reconsider what we will do if we don’t close it (the deal).”

Close to pulling out

Now, just over two months down the line, the Challenge Group appears to have seriously begun reconsidering its position with regard to the 777s, which will require significant work due to their lengthy grounding. Indeed, according to ch-aviation, the company has threatened to pull out of the deal, frustrated at the lengthy delays and what it has described as procrastination from the parties involved.

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Should the Challenge Group scrap the deal, it will reportedly demand the return of its deposit with interest, which would be a costly outcome that may even lead to further disputes. According to CNBC, it has now been nearly two years since the Challenge Group’s bid for the three Boeing 777-300ERs was accepted, with the letters of intent signed in October 2022. CNBC quotes Koish as telling Moneycontrol:

“Two months ago, after the Supreme Court’s order in our favor, the monitoring committee nominated a small working team to work closely with us because it’s easier to work in a smaller team and to negotiate. However, the new team and the monitoring committee stopped responding to us. (…) Nobody wants to actually do anything productive.”

Not over until it’s over

Despite the Challenge Group’s frustration, Koish insists that the company has a good relationship with the parties involved in the deal, having met and spoken to them at length. Furthermore, the company “[has] not set a deadline to walk away.” For now, all the Challenge Group can do is “[hope] that the NCLT will direct all parties to continue with the deal and that all relevant parties will spring into action.”