Jet Airways timeline: How the 'Joy of Flying' airline's dreams soured

Current Affairs

Beleaguered carrier Jet Airways halted all operations on Wednesday after its lenders rejected its plea for emergency funding from the airline that was once India's largest private carrier.

The airline, known for its "The Joy of Flying" tagline, has been teetering for weeks, saddled with over $1 billion in debt.

Its lenders, led by State Bank of India (SBI), last month agreed to bail it out in a complex deal that involved the banks taking a majority stake and providing a fresh loan of $217 million, while continuing to look for a new investor. That loan never materialised, gradually crippling the 25-year old airline's operations.

Here are some major developments in Jet's story:

2018

Aug 3 - Jet denies media report it cannot fly beyond 60 days, dismisses rumours of stake sale

Aug 11 - State Bank of India (SBI) chairman says Jet's loan is on watch list. Jet says regularly paying banks.

Aug 27 - Jet posts June-quarter loss, says will inject funds, cut costs by more than 20 billion rupees ($288 million) in two years

Sept 6 - Jet says paid salaries to 84 percent of its employees after media reports that pilots warned 'non-cooperation' over salary default

Nov 5 - Media report says Indian conglomerate Tata Group aims to buy 51 percent stake in airline and merge Jet with Tata's Vistara


 Dec 5 - Jet and UAE's Etihad Airways have been holding rescue talks with Jet's bankers, sources tell Reuters..Read More

Jet's luck has finally run out: What its collapse says about India

Company News

It looks like Jet Airways Ltd.’s luck has finally run out. India’s oldest privately owned airline is on the verge of shutting down all its flights -- it already has perhaps fewer than 10 aircraft active -- because it simply doesn’t have enough working capital. It’s more than a billion dollars in debt and has lost money for the last four quarters.

On one level, you could argue that this is a good sign for India: Its institutions are holding up. State-owned banks are Jet’s biggest creditors and they seem unwilling to throw more money at the airline without a clear revival plan. This is a big change from the past, when they kept supporting one of Jet’s rivals, the ill-fated Kingfisher Airlines Ltd., long after it seemed rational to do so.

News also broke a few days ago that Jet’s founder, Naresh Goyal, was no longer bidding for the banks’ stake in the airline, perhaps because other shareholders wouldn’t play along. Too often India cash-strapped companies have managed to get their debt restructured, with state-owned banks taking a haircut while the “promoters” who control crucial amounts of equity maintain control of the company. That is an unhealthy lack of accountability and we should all be glad it doesn’t seem to be happening in this case.


 Jet has 23,000 employees and a devoted fan base, yet isn’t an easy company to love. I say its luck has run out because in the past it consistently seemed to benefit from government intervention that drove many of its full-service competitors out of the market. It’s the only survivor from the first round of private Indian airlines that started flying in the 1990s -- and, in many Indian sectors, that usually means that you’ve managed the government much better than your peers have.In the end, however, the market wins out. If you are competing against low-cost airlines that still somehow provide equivalent service in economy class -- not to mention a full-service airline, Air India Ltd., that’s state-owned and can absorb whatever losses it wants -- you can’t dodge fate forever...Read More