How The Joy Of Flying Came To An End

Grounding of East West (1996), Damania (1997), Air Sahara (2007), Air Deccan (2007), Paramount (2010), Kingfisher (2012), and now Jet Airways may have different reasons but they commonly point out that the aviation sector is cyclical in nature.

- Rajiv Khosla

Although, small airlines fail to draw much attention, but a debacle in case of revered airlines ignite a debate among all sections of society due to the associated interests of different stakeholders. The grounding of Kingfisher Airlines and now of the Jet Airways has turned out to be the talk of the town.

Both the airline giants have also shown similar symptoms ahead of getting decimated. Few months before its extermination, Kingfisher Airlines struggled to run its full fleet of airbuses, pay salaries to its nearly 7000 employees and faced net losses of 754 crore besides an outstanding debt of 7000 crore.

Almost same is the fate of Jet Airways today, of course, the nightmare is bigger here. Vijay Mallya, the owner of Kingfisher owned multiple profitable businesses like United Spirits Ltd., United Breweries and Mangalore Chemicals & Fertilizers, was also a prominent real estate player. Further, loans to Mallya were secured as he pledged assets to the banks in many cases. After a lawsuit, most of his assets can be monetised, but in case of Naresh Goyal (Jet Airways), bankers cannot recover any money (unless some buyer/s takes over Jet Air) as he has no other business. It becomes important here to understand the chinks that led to the downfall of the uncrowned czar of the travel industry having 120 aircrafts in its fleet.

The downfall is analysed from different dimensions to have an explicit view of the factors culminating into the disaster.

Financial perspective