Why India’s Once-Largest Private Airline Rested Its Wings

Jet Airways (India) officially stopped its operations in April, marking the end of an era. For many, their first flight memories were associated with Jet. For thousands of people, it marked the end of a stable job. Shock prevailed over the entire Indian economy as this international carrier, which was once India’s largest private sector airline in a market largely dominated by state-run flights, hit a roadblock.

Operating in a state of financial crisis since quite some time, the mighty Jet finally retired from the skies when a consortium of its lenders informed via SBI that they will not be able to provide emergency funds amounting to Rs 400 crore. Without funding, Jet is unable to pay for fuel or other critical services to keep the operations going. It is unclear whether the airline will ever resume operations, but if it does so, it will be under a new ownership structure. If sufficient fresh equity is not brought in by May, it will mark the end of one of India’s premium carriers since 1993.

For the insiders, this crisis was not totally unforeseen. Jet had run into a tight spot since quite some time. Since many months, Jet had postponed salaries of its staff and even imposed 25 percent cuts on some. For a whole year, the airline investors have been trying desperately to save it from being grounded, including halting international flights.

This crisis is a huge throwback to the 2012 shutdown of Kingfisher airlines. Aviation consultancy experts are of the opinion that when an airline shuts down in India it never restarts. And they speak with good reason. All of Jet’s hopes are pinned on getting new equity from bidders, but the outstanding salaries have made sure there is no staff left which will not earn Jet any credibility from potential bidders. To make matters look worse to bidders, Jet Airways has deferred interest payments to banks, and dues to fuel suppliers, oil marketing companies and aircraft lessors. The investors have been very vocal about needing assurance for their returns before putting in any further money on Jet.

While thousands have been laid off jobs with months of salary outstanding, it is truly heart-breaking to see one of India’s biggest airlines hit such an all-time low. One can only hope for a quick resolution to this conflict so that Jet can clear off its dues and return to providing the warm hospitality it is known for.