Jetlink Face Wind-Up As East Africa’s Low Cost Airline Market Gets Tough

Jetlink Face Wind-Up As East Africa’s Low Cost Airline Market Gets Tough

JetLink Express Limited, a Kenyan-based low-cost airlines that operated in the East Africa region could wind-up it operations by the end of this year after a local court allowed a petition to dissolve it over a $39 million debt it owes several companies.

The ruling was made after FineJet Ltd, an oil company in the East African nation, sought legal action against the airline for failing to pay $161,990 for jet fuel that was supplied in 2012, Business Daily reported.

Jetlink also owes Mexican CRJ Ltd $22 million and Equity Bank, a local financier, $8 million.

Other creditors owed by the airline and who were enjoined in the suit are Kenol Kobil Ltd $193,598, Avmax Spares (E.A) Ltd $579,806, Kenya Civil Aviation Authority $143,223, Kenya Aerotech Ltd $ 17,779 and National Bank of Kenya $ 5.9 million.

Justice Farah Amin, who presided over the case, said that FineJet Ltd had satisfied all legal requirements seeking orders to shut down the airline after it failed to pay the debt within 21 days, Business Today reported.

She ordered that the JetLink directors, Captain Elkana Aluvale and Captain Kiran Patel be enjoined in paying costs for the winding-up petition. Justice Amin gave them 14 days to respond to the petition.

The airline had been in financial crisis since November 2012 after a failing to access over $2 million that was held in South Sudan due to a foreign currency crisis, Daily Nation reported.

It had expected to resume operations after four months.

Last year, Sharaddha Builders Limited a contractor who build a hangar and office block for the airlines went to court in an attempt to block JetLink Ltd from selling its $1.718 million property over a debt of $291,322, Business Daily reported.

Other low-cost airlines operating in East Africa include JamboJet, owned by Kenya Airways, Fly540, Fastjet and Kulula.

The imminent shut down of the once booming low-cost carrier comes at a time when the aviation industry in East Africa’s biggest economy is facing uncertain times.

Kenya Airways, one of the leading airlines in Africa, recorded a $258 million loss last year, extending a three-year losing streak. It plans to lay-off 600 workers and has already cut its fleet, Bloomberg reported.