Jet Airways has always been a household name for the young aspirational Indian. Born at the dawn of liberalization, it removed the monopoly previously enjoyed by Air India and Indian Airlines.
The start of private airlines in India was a great boon. They focused on customer service, baggage delivery and various in-flight services and entertainment. Jet Airways first started as an air taxi operator. Soon later, the airline had four Boeing 737-300 aircrafts in its possession. In1994, it became India’s second-largest private airlines.
It was in 2003 that the government allowed private airlines to operate internationally, however, restricting to only countries in South Asia like Bangladesh, Nepal and Sri Lanka. In March 2004, Jet Airways spread its wings to Sri Lanka, with its first international flight from Chennai to Colombo.
In 2005, Jet Airways soared across oceans with its first long haul flight to London. Since 2007, Jet Airways has had a scissors hub at Brussels Airport for onward transatlantic connections to North America, which was replaced by Amsterdam Schiphol Airport from 27 March 2016.
In 2008, the airline had to discontinue international routes because these attracted losses due to global economic downturn. It terminated services to San Francisco and Shanghai. In 2012, the airline withdrew flights to New York and shut the Delhi–Milan route in 2013.
On 1 March 2016, the airline announced the integration of domestic and international operations in Mumbai airport and moved its entire operations to the newly constructed Terminal 2. In 2018, Jet airways announced a new destination, Manchester in UK. It will start operations to Manchester from its hub, Mumbai from November. It would be the first airline to connect Manchester with India.
In 2008, Jet Airways got listed on the Bombay Stock Exchange, making it a public company. The government then lifted the foreign ownership limits on Indian airlines to 49% from the previous 40%. The airline decided to raise funds via an IPO. The company’s IPO in February 2005, which offered 20% of the airline’s stock. This attracted many investors leading to oversubscription in retail, non-institutional and institutional tranches and raised Rs 18.9 billion.
In 2018, Jet Airways felt turbulence. Initially, the premium airline suffered three back-to-back quarterly losses starting from the January-March quarter when it reported a massive loss of Rs 1,045 crore; then in the April-June quarter when it reported a loss of Rs 1,323 crore.
The loss increased in the July-September quarter when it met a Rs 1297.5 crore loss. It was said that the airline did not have enough capital to operate beyond 60 days. To add to that, during the period from June to September 2018, there was a hike in global oil prices, forcing airlines to increase spending on ATF (Aviation Turbine Fuel). However, that cost was not transferred to the passengers owing to the low-cost model. This led to a significant increase in operational costs.
In 2019, they sunk deeper into debt. Many say the problem arose in the mid-2000s, when Jet Airways began dropping fares, some to below cost. Unlike budget operators, full-service airlines such as Jet Airways offer such amenities mostly for free. Jet Airways lost money in all but two of the past 11 years and has Rs 72.99 billion ($1 billion) of net debt. While it didn’t separately disclose cash and cash equivalents as of December 31, Bloomberg calculations show the airline had about Rs 3.55 billion of cash at the end of last year. It defaulted on loans that were due by December 31 and has delayed payments to staff and lessors.
On April 17th, the Jet crisis has hit its employees hard with hundreds not getting paid for months. The pilots of the airline appealed to Prime Minister Narendra Modi, saying that 20,000 jobs would be at stake if the airline went under.
As per a few reports, the lenders rejected Jet’s request for Rs.400 crore while trying to identify an investor willing to acquire a majority stake in the airline and get it back to its earlier position.
Debt-ridden airline Jet Airways (India) Ltd. has announced that it would halt its entire operations from Wednesday night i.e 17th April. This is also a temporary shut down for a Jet Airways and the legacy it brought to the Indian aviation industry.
