Millennium Post

Flying into oblivion?

India's oldest privately owned airline has finally been grounded but with an optimistic footnote that says its operations have been suspended on a "temporary" basis after it failed to secure a bailout. A large number of Jet's aircraft have been repossessed and most of its most coveted flying slots, both national and international, have been farmed out to other airlines. This has been done to distribute the capacity among other dominant players as airports cannot wait indefinitely for one particular airline company to use the desired slots. Jet is more than a billion dollars in debt and has lost money for the last four quarters with employees' salaries remaining unpaid for several months. Jet is staring at an imminent shutdown and the airline's balance sheet may be quite intimidating for even an intrepid investor. This entire episode would bring to an end of an era in Indian aviation history. From flying around 123 aircraft in its prime, it was reduced to just five on its last day. Interestingly, there has been an evident change from the past when state-owned banks rendered what seemed like unconditional support to Kingfisher Airlines Limited, even after it had lost its credibility. This time, in Jet's case, banks have realised that a small amount of emergency funding would not be enough to keep the airline afloat. Several news reports suggest that instead of the Rs 400 crore sought by the Jet management as critical emergency funding initially, the lenders were offering only Rs 1-2 crore daily so that five aircraft could operate which did not look feasible for the management. Apart from all this, there is also a definite urgency. Letting Jet Airways fly and keeping the business operational has been the top priority for the Centre during these last few weeks as the Lok Sabha elections have begun and this exercise would mean preventing over 16,000 jobs from vanishing at one go. In turn, this would also mean that a number of ministries including Civil Aviation and Finance along with some of the top banks are on a face-saver mode and have been doing their best to save the sinking ship. However, as all valiant efforts come to an abrupt end, Jet, in all likelihood, is on its way out. This would leave a big void in the world's fastest-growing aviation market and it remains to be seen if there would exist a single full-service domestic airline in India at all in the near future. Also, it would be a matter of challenge for those entering the scene with much enthusiasm to compete in an increasingly growing Indian market that may not look as stoic as its international counterparts.

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