New Delhi: Jet Airways Ltd’s 69-year-old founder Naresh Goyal, who started out as an assistant in a travel agency, wove together charm, persistence and consummate dealmaking to build India’s biggest full-service carrier.
Now, his penchant for control has emerged as a major obstacle as the indebted airline tries to negotiate a rescue deal, several people who have worked closely with him or known him over the years told Reuters on condition of anonymity.
“He was a visionary in his day but those days are behind us,” said a senior aircraft financier who has done deals with Goyal. “This is the moment of truth for Naresh Goyal.”
The rising dominance of low-cost carrier IndiGo in a price sensitive market as well as high oil prices, hefty fuel taxes and a weak rupee have left Jet strapped for cash and unable to pay employees and lessors on time.
The 25-year-old airline, which Goyal set up with his wife at a time when state-run Air India was the only real formidable opponent, has outstanding dues of about $400 million.
Jet, which has a mainly Boeing Co fleet, has delayed pre-delivery payments to the Seattle-based aircraft maker as well as to Airbus SE, and is overdue on its repair and maintenance contracts, two sources aware of the matter said.
Although the Indian air travel market is the world’s fastest growing, at about 20 percent a year, it is also hobbled by cut-throat competition and chronically low fares. To stay afloat, Jet is cutting flights on some non-profitable routes and trying to raise cash by monetising assets.
It still retains a valuable strategic position as the biggest operator at Mumbai airport, where all of the good slots have been taken and a second airport is years away. It also has lucrative slots at major international airports and code share agreements with more than 20 airlines.
14/12/18 Reuters/Times of India
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Now, his penchant for control has emerged as a major obstacle as the indebted airline tries to negotiate a rescue deal, several people who have worked closely with him or known him over the years told Reuters on condition of anonymity.
“He was a visionary in his day but those days are behind us,” said a senior aircraft financier who has done deals with Goyal. “This is the moment of truth for Naresh Goyal.”
The rising dominance of low-cost carrier IndiGo in a price sensitive market as well as high oil prices, hefty fuel taxes and a weak rupee have left Jet strapped for cash and unable to pay employees and lessors on time.
The 25-year-old airline, which Goyal set up with his wife at a time when state-run Air India was the only real formidable opponent, has outstanding dues of about $400 million.
Jet, which has a mainly Boeing Co fleet, has delayed pre-delivery payments to the Seattle-based aircraft maker as well as to Airbus SE, and is overdue on its repair and maintenance contracts, two sources aware of the matter said.
Although the Indian air travel market is the world’s fastest growing, at about 20 percent a year, it is also hobbled by cut-throat competition and chronically low fares. To stay afloat, Jet is cutting flights on some non-profitable routes and trying to raise cash by monetising assets.
It still retains a valuable strategic position as the biggest operator at Mumbai airport, where all of the good slots have been taken and a second airport is years away. It also has lucrative slots at major international airports and code share agreements with more than 20 airlines.
14/12/18 Reuters/Times of India
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