FRESH HOPE FOR JETLINK AS AGREEMENTS IS REACHED WITH KEY CREDITORS
(Posted 22nd March 2014)
Kenya’s Jetlink may yet see light at the end of a long and dark tunnel as information received late yesterday could be confirmed this morning that the company has reached a provisional settlement agreement with their key creditors.
Only in November last year did the Kenya Civil Aviation renew the air service license for Jetlink, effectively keeping them ‘in business’ and even though the all-important AOC – short of air operator certificate – can only be regained through a renewed audit process ahead of resuming actual operations, the airline was thrown a lifeline back then. Some of the more hardline debtors at that stage moved to court to challenge the renewal of the license by the KCAA, a suit which has not yet been heard and which, should the current round of negotiations succeed, may well be withdrawn in due course.
The shareholders and directors seem to have used the time well since they retained their ASL and have according to details at hand made firm commitments to repay some long overdue debts by the end of April 2014.
Jetlink was forced to halt operations and ground their jets when the Central Bank of South Sudan in a move which can only be described as broad daylight robbery denied Jetlink’s request to repatriate over 2 million US Dollars in ticket sales, holding the money instead of remitting it as international airline regulations require and leaving Jetlink short of funds to continue pay for fuel, landing, navigational and parking fees and other expenses like maintenance.
Principal owners Captains Elly Aluvale and Kiran Patel have always maintained that they were exploring ways and means to return the airline into the skies, and while some shortlived talks with Tanzania’s FastJet did not produce results – FastJet was trying to circumnavigate their perceived blockage by supposed partner Fly540 to get into the more lucrative Kenyan market by checking out options to cooperate with another airline registered in Kenya – the two always insisted that they were in talks with other potential investors.
It now appears that in a major debt for equity swap, as proposed earlier on already by Jetlink, major debts may be settled while the 2 billion Kenya Shillings will reportedly go to pay for pending fuel, maintenance and lease bills.
The commercial court will have submissions heard by 07th of May to determine if the present agreement has been fulfilled and hear of the case at that stage can be ended.
Kenya’s aviation scene will by then, if and when Jetlink resumes operations, however have been shaken to the core as Jambojet, Kenya Airways’ LCC subsidiary, will begin flights on April 01st with fares as low as Kenya Shillings 2.850 one way taxes included, as long as the booking is done well in advance, and other low cost airlines are already locked in strategy sessions how such fares can be matched in order to stay in business.
Watch this space for breaking and regular aviation news from across Eastern Africa.
