Article Written by James Field, Thomas Saunders, Jonathan Winton
LONDON – India’s Jet Airways has announced the temporary cessation of all operations from Wednesday evening onward after Indian banks rejected any further funding for the failing carrier.
The last flight is scheduled to land later on this Wednesday evening.
After nearly 26 years, Jet Airways will shut down its domestic and international operations.
In January, its fleet consisted of a wide variety up to 123 aircraft. However recent events have seen their fleet reduced to just five operational aircraft.
Jet Airways released in a financial statement today that no other source of funding will be received, and that operations are to be canceled as a result.
“Since no emergency funding from the lenders or any other source is forthcoming, the airline will not be able to pay for fuel or other critical services to keep the operations going,” the statement said.
“Consequently, with immediate effect, Jet Airways is compelled to cancel all its international and domestic flights. The last flight will operate today.”
The airline explained that the decision “has been taken after a painstaking evaluation of all alternatives that were made available to the Company and after receiving guidance and advice on the same from its Board of Directors.”
Jet Airways has informed the DGCA, and the Ministries of Civil Aviation and Finance and other relevant government institutions, of this course of action.”
A Dramatic Road To The End
The airline’s final flight will be from Amritsar to Mumbai.
The airline has been plagued with financial issues for a long time. Between the financial years of 2010 and 2018, Jet Airways only posted a profit twice, despite a constant increase in flights.
Last November, however, is when reports started to surface in regards to financial difficulties.
In March, the first of the airline’s issues began to become noticeable, with nearly a quarter of its fleet grounded or repossessed, as a response to their unpaid leases.
March 25th saw Naresh and Anitha Goyal (the airline’s founder/chairman and his wife) step down from the board of directors, with the hope that this action would open the road to a potential investment deal, however, as we have seen it has not become a reality.
On April 5th, the Indian Oil Corporation (IOC) stopped supplying Jet Airways with fuel for their aircraft, after the airline had failed to pay their fuel bills to IOC.
At the same time, the airline’s crew announced their intention to stop working if their previous three months worth of wages were not paid. Simultaneously, the lessor of the airline’s Boeing 777 fleet started the repossession process due to unpaid leasing fees.
Finally, on April 12th, the announcement of the suspension of the airline’s international arrived, alongside its Eastern India routes. According to the airline, the reason was cited due to a lack of aircraft.
By the end of 2010, Jet Airways became the largest airline in India, with a market share of 22.6%. However, the airline was still loss-making in the 2010 financial year posting a loss of ₹16.4 million. This was achieved while averaging a load factor of 77.4%.
In 2013, Etihad tried to come to the rescue by purchasing a 24% stake for $379 million, which allowed Jet Airways and Etihad to expand their route networks via codeshares.
The previous year had seen the carrier seek government approval to join Star Alliance, however, it never came to be.
In July 2018, the airline placed a massive order for an additional 75 Boeing 737 MAX 8 aircraft, worth $8.8 billion at list prices.
The fate of these ordered 737 MAX slots remain uncertain, at the moment.
Sadly, a terrible year for the airline industry has gone from bad to worse, with Jet Airways having gone from being India’s largest airline to nothing in less than 10 years.