Challenge Group closer to taking possession of Jet's B777s
"The cost to return a Boeing 777 to airworthy condition could easily reach tens of millions of dollars per aircraft."

As Jet Airways' liquidation process begins nearly six years after the airline ceased operations in April 2019, the Indian Supreme Court's November decision to overturn the National Company Law Appellate Tribunal’s (NCLAT) approval of a takeover bid has led the National Company Law Tribunal (NCLT) to appoint Satish Kumar Gupta as the liquidator.
Now that the liquidation process has begun, there are positive indications for Ace Aviation, a Malta-based subsidiary of the Challenge Group, to acquire three grounded Boeing 777 aircraft. The company had bid for these aircraft in 2022 with plans to convert them into dedicated freighters. However, despite paying a total deposit of $5.6 million and signing a letter of intent, the acquisition was blocked. The deal includes $4.6 million as an Earnest Money Deposit (EMD) for three aircraft parked in Mumbai, along with $1 million as token money for two Boeing B777s stationed in Delhi.
The company has begun planning the conversion of these Jet Airways B777s and is in talks with Israel Aerospace Industries (IAI) for the cargo conversion. The B777-300 Extended Range Special Freighter (ERSF), or the “Big Twin," is a passenger-to-freighter (P2F) conversion programme for the Boeing 777-300ER aircraft. Israel Aerospace Industries (IAI) and AerCap Cargo launched the programme in 2019. The programme is still awaiting certification completion by the Federal Aviation Administration (FAA). However, the certification process has significantly delayed the aircraft's market entry, and Kalitta Air, the first customer, has still not received the delivery of the aircraft.
In a statement to The STAT Trade Times, Michael Koish, Chief Investment Officer of Challenge Group, discussed the conversion plans if the aircraft transfer to the company proceeds, “Upon acquiring the B777s from Jet Airways, we plan to convert them into freighters using the conversion slots secured with IAI for 2025 and 2026.”
“The Supreme Court’s decision to liquidate Jet Airways has resolved many of the earlier legal challenges, creating a more constructive environment for negotiations. The liquidator’s involvement has fostered greater collaboration among all parties. While a few procedural and administrative steps remain, we are confident these can be efficiently managed to complete the acquisition soon,” he added.
However, despite positive indications toward acquiring the Jet Airways aircraft, the Challenge Group still faces legal complexities and technical hurdles. After being parked for several years, the aircraft are not in a flyable condition and will require proper maintenance, repair, and overhaul (MRO) checks and approvals to be deemed airworthy.
“Since these aircraft have been grounded for approximately five years, they will undergo thorough inspections and significant maintenance to restore them to airworthy condition. We will collaborate closely with IAI, leveraging their expertise to ensure that the aircraft meet all regulatory and operational standards. Our team is fully prepared to address these challenges, and we are confident in delivering high-quality operational readiness efficiently,” says Koish of Challenge Group.
As the liquidation process is still not finalised and no decisions have been made regarding the ownership of the aircraft, the company has not finalised any local MRO service provider yet and is still in the early stages of discussions. However, Israel Aerospace Industries (IAI) also provides MRO services under the name BEDEK MRO.
Experts believe that this will not be easy, and making a grounded aircraft airworthy will require a significant investment.
“The costs to make a grounded Boeing 777 aircraft airworthy can vary greatly, depending on its condition and inactivity period. Key expenses include maintenance and inspections, a full “Return to Service (RTS)” inspection can cost between $500,000 and $2 million per aircraft, For engine overhaul, depending on the condition of the engines and the number of hours since the last overhaul, engine maintenance can cost between $10 million to $15 million per engine,” says Gagan Jacobs, a seasoned aviation professional with 30 years of diverse experience, is a recognised leader in the aviation industry. He has a proven track record of success in leadership roles, including power plant management, strategy, cost reduction, team leadership, and core support team and restart initiatives.
“If the aircraft is outdated or no longer meets current regulations, modifications may be necessary. These could include avionics upgrades, safety system improvements (e.g., ADS-B, flight data monitoring), and possibly even cabin reconfiguration. The cost for modifications could range from $2 million to $5 million, depending on the scope while certification costs, covering regulatory reviews and any changes made, can also reach several million dollars.”
“In total, the process to return a Boeing 777 to an airworthy condition could easily run into the tens of millions of dollars per aircraft, depending on how much work is required.”
“The aircraft need to be technically sound in order to retain their value, any purchaser will have to carry out its strict due diligence prior to parting with its money. Legal risks include complications during the liquidation process; possible lack of aviation terms and technology by the liquidation team; the requirement to approach a Tribunal or Court in case of some issue (which can take months to resolve) are some of the legal challenges and risks associated with the purchase of these former Jet Airways aircraft,” says Nitin Sarin, Managing Partner, Sarin & Co., one of India's oldest and leading law firms specialising in aviation finance, aviation regulatory services as well as litigation.
From the perspective of the Directorate General of Civil Aviation (DGCA) regarding approvals and regulations, Raju Kethavath, Airworthiness Inspector, DGCA, explains:
"If an aircraft is grounded for a long period and needs to be restored to service, it will require an RTS package from the Original Equipment Manufacturers (OEMs). The operator or owner must collect necessary technical data, including inspections, component replacements, and overhauls for various parts such as the airframe, engines, auxiliary power unit (APU), avionics, and software updates. This comprehensive data must then be submitted to the DGCA for approval."
"After the OEMs issue the RTS package and it’s evaluated by the DGCA, the operator can proceed to issue work orders, referring to the DGCA's approval, to carry out the necessary maintenance. Once the maintenance is complete, including ground checks, the aircraft will be issued a Certificate of Release to Service (CRS). The operator must submit the completed maintenance package to the DGCA, along with an application for a special flight permit or test flight. If the documents are satisfactory, DGCA will grant approval for the test flight. Upon successful completion of the test flight and a satisfactory report, the airworthiness certification process will begin. The RTS package, covering most areas, leads to the issuance of an airworthiness review certificate (ARC), and the DGCA will issue both the certificate of airworthiness (C of A) and ARC, subject to the aircraft’s lease and physical condition.”
Due to delays in acquiring aircraft from Jet Airways and with air freight demand at elevated levels, Challenge Group procured a B777-300ER for conversion from another source earlier this year. “This aircraft is scheduled for conversion at a pre-secured slot with Israel Aerospace Industries (IAI) in 2025. Additionally, we have secured multiple conversion slots with IAI from 2025 to 2027,” says Koish of Challenge Group.
More recently, the company added a Boeing 747-400 production freighter to its fleet, registered under its Belgian Air Operator Certificate (AOC). This move is part of the company's fleet expansion strategy to enhance its global cargo capabilities.