Naresh Goyal, the founder chairman of Jet Airways, offered to invest Rs 250 crore in the company to revive the Mumbai based air carrier. He stepped down as chairman in April but his efforts to save the company continued. In a letter to employees, Goyal said “Since stepping down from our respective positions, Neeta (Goyal) and I have had no role at Jet Airways after having made every possible sacrifice and commitment to ensure that the best interests of our Jet Airways family are served.” The workers of Jet Airways have not received salary since beginning of the year.
The consortium of lenders has rejected the proposal by Goyal to retain the control of the company. The company is under the debt of more than 1 billion dollars and few serious bidders like Etihad Airways, TPG Capital and Indigo Partners and government-backed National Investment and Infrastructure Fund (NIIF) are negotiating the deal for Jet Airways with the lenders.
Jet Airways, one of India’s prominent airlines, which held more than 15 percent of market share in civil aviation has been grounded. The company employed more than 16,000 people and was the third largest air carrier in the country. Over the years it has accumulated a net debt of Rs 7,299 crore and net loss of the company stood at Rs 13,980 crore as of December 2018. The company asked the lenders who control the board for funds but the plea was rejected.
The company operated 600 daily flights a few months ago and on the last day, it operated only 17 services with five plans. The company has a dramatic rise and changed the rules of the aviation industry in the last two and a half decade. It began operations as taxi operator in 1993 and was granted scheduled airline status in 1995. Naresh Goyal, the person who became synonymous with the airline acquired 40 percent stake in the company from Gulf and Kuwait airway in 1997. In 2004, Jet became the first private company to operate an international flight. It broke the monopoly of state-led companies like Air India and Indian Airlines. The company launched its IPO in 2005 and acquired Sahara air in 2007.
The downfall of the company started after acquiring debt-ridden Sahara Air, which proved to be a bad decision. In 2013, it sold 24 percent stake to Etihad Airways. However, this could not save the debt-ridden company and its market leadership continued to weaken. The entry of other low-cost airlines like IndiGo and Spice Jet further dampened the chances of revival. Jet Airways could not stand the competition posed by other efficient low-cost airlines in the market.
Finally, the company has ended its operations. Earlier, the government had ruled out any intervention in the crisis-ridden Jet Airways. Many experts expected the government to help out the company. However, the Modi government is firm that the businesses should work on market principals and if a company is not able to make profits, it should exit from the business. The era of spoon feeding the private companies in the name ‘strategic importance’ is over. Now if a company is not able repay its dues, the management will be transferred to the lender and the company will be on their mercy.