Yesterday, April 17, 2020, marked the first anniversary of the demise of one of the most colossal airline in India, Jet Airways. Exactly a year ago, about 25,000 employees of Jet were optimistic that their carrier’s troubles – a debt of over Rs 14,000cr. ($2bn approx.) – would be over once the founder of the company, Naresh Goyal was asked to exit the board. The airline was taken over by the lenders led by the State Bank of India, and a global hunt ensued to find a new owner for one of India’s iconic airline brands.
However, after exactly a year, all hopes of a revival have eroded. Even though as many as 15 entities had shown interest over the past 12 months, no one has submitted a financial bid so far. The ongoing cataclysm in the global aviation industry due to the COVID-19 pandemic has practically wiped out any remaining hopes of finding a new owner for Jet Airways.
The Rise of Jet Airways
Jet Airways won itself a multitude of accolades and hence, ardent customers, when it commenced operations in May 1993, as it redefined the flying experience in Indian aviation industry. The success of Jet reached its epitome in the last decade, when it grew steadily, thereby, becoming India’s largest international carrier.
The airline became the first one to order Boeing 737-800 in Southeast Asia in 1999, when it placed an order for eight such aircraft worth $550mn. This would lay the foundation for what would become one of Jet’s most valued asset. Over the years, Jet utilized the 737-800 aircraft prudently, and by April 2019, the Boeing 737 (-700, -800, -900ER and -8) constituted about 85 percent of its total fleet.
After the surge of success in early 2000s, Jet Airways became a public company on December 28, 2004. The airline, led by Naresh Goyal, focused both, on service and operations. In January of 2005, the Ministry of Civil Aviation, India, granted rights to the carrier to operate services to London Heathrow, United Kingdom (LHR). The airline inaugurated its first international, long-haul flight to London in May 2005 with two-class Airbus A340-300s sub-leased from South African Airways.
As the Low Cost Carrier (LCC) war began in India by 2005, when many airlines, including Indigo Airlines, Air Sahara, Paramount and Air Deccan started capitalizing the market, Jet announced its intention to acquire Air Sahara for $500mn. With some impediments, the deal went ahead, and Jet re-branded Air Sahara as ‘JetLite’ in April 2007. Further, in May 2009, Jet launched another LCC, ‘JetKonnect’, further to assort its paraphernalia. With a strong fleet, a beloved brand, allegiance of customers and three airlines under the ‘Jet’ tag, the company had reached the crescendo by 2010, when it became the largest airline in India with a market share of 22.6%.
Just as with Air India, a quite contrasting fable unfolded post 2010, and the airline would start its journey descending. One domino fell after the other, such that, by late 2018, the airline had a negative financial outlook due to increasing losses. In its years of prime, Jet Airways was the preferred choice of businessmen, luxury and budget travelers alike.
Jet reaped unimaginable success and unfolded a scintillating business model that invoked a sense of pride among its passengers and employees alike; and just like many other airlines in the country, the carrier then took a steep dive, toiling its way to thrive amidst the highly cost sensitive war of the domestic LCCs!
In the part 2 of this article, we will look into the downfall of India’s most vintage carrier, and how, an airline which defined ‘The Joy of Flying’ ended its saga. Stay tuned!
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