The Final call

Jet Airways’ lenders have worked out a survival plan. Will it work?

- Manu Kaushik

As a young professional working at his uncle’s travel agency in Delhi, Naresh Goyal, the Chairman of Jet Airways, had exact schedule of almost every flight in the country on his fingertips. This perseverance and handson approach, added to his deal making skills, came in handy as he went on to build full-service carrier Jet Airways from the scratch, an endeavour that destroyed Air India’s monopoly in Indian and international skies. However, Goyal’s once-formidable empire, shaky for the last five years, has started crumbling, thanks to his strategic mistakes, heavy management churn and changes in the external environment such as rise in aviation turbine fuel, or ATF, prices and rupee depreciation.

Jet’s market share tanked from 16.6 per cent in January 2018 to 13.6 per cent in January this year. Market shares of almost all major private carriers either rose or remained steady during the period. The airline has been posting net losses for the past four quarters. This is in sharp contrast to rivals IndiGo, SpiceJet Vistara and GoAir, which suffered losses for a few quarters, but managed to survive the last year’s downcycle.

However, Jet seems to have fallen victim to severe cash crunch and debt pile-up. It has delayed salaries to employees, including the crew, for months. Several of its planes are grounded because it doesn’t have cash to pay lessors. In January, it defaulted on a debt payment, which was followed by a downgrade by ratings agency ICRA.