In 2005, Naresh Goyal had written off low-cost airlines. The reasoning provided by the founder and chairman of India’s oldest private carrier was that since most Indian cities don’t have a second airport, all airlines end up paying the same operational charges. Thus, the economy players don’t have any significant advantage over their full-service rivals.
Fourteen years later, his Jet Airways is reeling under a mountain of debt and 12 straight loss-making months in its war with no-frills carriers.
The Mumbai-based firm has defaulted on bank loans. Its lenders are reportedly in talks with UAE’s Etihad Airways, which owns a 24% stake in Jet, for a turnaround plan widely expected to result in Goyal parting with his majority stake.
Such an exit would mark the ignominious end of a storied journey.
Goyal was born in the northern state of Punjab in 1949. He moved to New Delhi at the age of 18 to work with his uncle as a sales agent for Lebanese International Airlines. During this period, he earned less than Rs2,500 ($33) a month and slept in the office.
He learned the ropes of the travel industry on this and his next few jobs. Seven years later, with money from his widowed mother, he launched his own agency, Jetair, which would later represent Air France, Austrian Airlines, and Cathay Pacific in India.
His dream of launching his own airline was up against India’s then nationalised aviation industry, which had only one state-owned domestic carrier, Indian Airlines.
In 1991, though, the tide turned in his favour when the government began liberalising the economy. Two years after India allowed private players in the sector, Jet Airways flew its first aircraft.
With its superior service quality, Jet soon set itself apart from Indian Airlines. Within two years of its launch, the number of passengers it carried more than doubled to 1.5 million.
18/03/19 Kuwar Singh/Quartz
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Fourteen years later, his Jet Airways is reeling under a mountain of debt and 12 straight loss-making months in its war with no-frills carriers.
The Mumbai-based firm has defaulted on bank loans. Its lenders are reportedly in talks with UAE’s Etihad Airways, which owns a 24% stake in Jet, for a turnaround plan widely expected to result in Goyal parting with his majority stake.
Such an exit would mark the ignominious end of a storied journey.
Goyal was born in the northern state of Punjab in 1949. He moved to New Delhi at the age of 18 to work with his uncle as a sales agent for Lebanese International Airlines. During this period, he earned less than Rs2,500 ($33) a month and slept in the office.
He learned the ropes of the travel industry on this and his next few jobs. Seven years later, with money from his widowed mother, he launched his own agency, Jetair, which would later represent Air France, Austrian Airlines, and Cathay Pacific in India.
His dream of launching his own airline was up against India’s then nationalised aviation industry, which had only one state-owned domestic carrier, Indian Airlines.
In 1991, though, the tide turned in his favour when the government began liberalising the economy. Two years after India allowed private players in the sector, Jet Airways flew its first aircraft.
With its superior service quality, Jet soon set itself apart from Indian Airlines. Within two years of its launch, the number of passengers it carried more than doubled to 1.5 million.
18/03/19 Kuwar Singh/Quartz
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