In an industry as volatile as aviation, 12 years can be a long time. Long enough for Jet Airways’s descent from being one of the most preferred airlines with offerings that matched those of top-rated international carriers to one that’s fighting for survival.
According to a report of the Directorate General of Civil Aviation (DGCA), for February 2019, Jet Airways, along with JetLite, the company’s wholly owned subsidiary, received the highest passenger complaints at 3.1 per 10,000 passengers. These complaints are over a number of issues such as fares, refunds, flight delays and cancellations, baggage handling, etc. Next on the list was Air India (domestic) with 1.5 complaints per 10,000 passengers.
While the airline has in its almost 26 years of existence ridden through – and survived – a number of rough patches, sector watchers see the carrier’s current run as its most turbulent yet.
Today, the airline is facing a crisis of confidence among its various stakeholders – faced with frequent disruption and complaints, its passengers are looking at other airlines; its pilots are interviewing for jobs with rivals; aircraft lessors are in discussions to take back planes rented to Jet so that they can be leased to other domestic carriers; and its shareholders are looking to offload Jet’s stock.
With the future of Jet’s 17,000 employees tied to the airline’s survival, efforts are being made at the highest levels of the government to ensure there are no job losses ahead of what is being billed as a defining election.
“In a situation where market forces are left free, it is healthy if an airline or an airport goes bust. It weeds out inefficiencies. But Jet is a large player and there are 17,000 families associated with it,” said a senior government official who is in the know of plans pertaining to Jet’s future.
In 1993, a year after its launch, Jet got its permit to fly as an air-taxi operator, which meant that it could fly but without a schedule. (A flight schedule allows a carrier to estimate costs and revenues for six months, the period of a single schedule in India.) Among the first flyers on Jet’s maiden flight from Bombay to Ahmedabad on May 5, 1993, was the pioneer of Indian aviation, J R D Tata.
Less than two years later, Jet Airways got the go-ahead to fly as a scheduled airline. This was made possible because the government had by then abolished the Air Corporation Act, 1953, which gave monopoly to State-owned carriers to operate as scheduled airlines.
Over the next few years, as Jet Airways started full-fledged operations, it grew to become the poster boy of private sector efficiency in India. Though the government’s Open Skies policy of 1992 — which called for the liberalisation of the rules and regulations of commercial aviation to create a free-market environment for the airline industry — coupled with the repeal of the Air Corporation Act, meant that the skies opened up to other private players such as ModiLuft, Air Sahara and East-West Airlines, Jet stood out from the pack. Until 2015-16, it paid among the highest salaries, spending Rs 67.04 lakh annually on each of its pilots. While ModiLuft and East-West ceased operations in 1996, Jet acquired Air Sahara in 2007.
While Jet continued to grow over the 1990s and early 2000s, in 2004, another change in government policy came as a boon for private carriers.
In December 2004, the Union Cabinet approved a proposal of the Ministry of Civil Aviation to allow “eligible” Indian scheduled carriers to operate on international routes. “Only Indian scheduled carriers with a minimum of five years continuous operations and having minimum of 20 aircraft in their fleet will be allowed to operate on international routes,” read the official statement dated December 29, 2004.
With about a decade of flying under its belt, Jet benefited immensely from the policy, which came to be known as the “5/20 rule” and which served to keep its relatively younger competitors such as the now defunct Kingfisher Airlines and Air Deccan out of international operations. In March 2004, Jet Airways and Air Sahara both launched their first international flights on the same route — Chennai to Colombo. In 2016, however, the government scrapped the 5/20 rule, which had been opposed by every new airline in India.
Over the years, as the founder-chairman of Jet, Goyal was able to foster relationships across the international aviation community and also managed to leverage some of these during times of trouble. One such relationship was with the Abu Dhabi-based carrier Etihad Airways, which, aided by relaxed FDI rules, picked up stakes in Jet. Goyal currently owns a majority 51 per cent stake in the airline, with Etihad holding another 24 per cent.
“You should never write off Naresh Goyal,” a senior official in the Civil Aviation Ministry had told The Indian Express last month, around the time that discussions at Tata Group on picking up stake in Jet Airways had gained serious momentum. “He has seen this airline through various seasons and he won’t let it go down without a fight,” the official had said.
23/03/19 Pranav Mukul/Indian Express
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According to a report of the Directorate General of Civil Aviation (DGCA), for February 2019, Jet Airways, along with JetLite, the company’s wholly owned subsidiary, received the highest passenger complaints at 3.1 per 10,000 passengers. These complaints are over a number of issues such as fares, refunds, flight delays and cancellations, baggage handling, etc. Next on the list was Air India (domestic) with 1.5 complaints per 10,000 passengers.
While the airline has in its almost 26 years of existence ridden through – and survived – a number of rough patches, sector watchers see the carrier’s current run as its most turbulent yet.
Today, the airline is facing a crisis of confidence among its various stakeholders – faced with frequent disruption and complaints, its passengers are looking at other airlines; its pilots are interviewing for jobs with rivals; aircraft lessors are in discussions to take back planes rented to Jet so that they can be leased to other domestic carriers; and its shareholders are looking to offload Jet’s stock.
With the future of Jet’s 17,000 employees tied to the airline’s survival, efforts are being made at the highest levels of the government to ensure there are no job losses ahead of what is being billed as a defining election.
“In a situation where market forces are left free, it is healthy if an airline or an airport goes bust. It weeds out inefficiencies. But Jet is a large player and there are 17,000 families associated with it,” said a senior government official who is in the know of plans pertaining to Jet’s future.
In 1993, a year after its launch, Jet got its permit to fly as an air-taxi operator, which meant that it could fly but without a schedule. (A flight schedule allows a carrier to estimate costs and revenues for six months, the period of a single schedule in India.) Among the first flyers on Jet’s maiden flight from Bombay to Ahmedabad on May 5, 1993, was the pioneer of Indian aviation, J R D Tata.
Less than two years later, Jet Airways got the go-ahead to fly as a scheduled airline. This was made possible because the government had by then abolished the Air Corporation Act, 1953, which gave monopoly to State-owned carriers to operate as scheduled airlines.
Over the next few years, as Jet Airways started full-fledged operations, it grew to become the poster boy of private sector efficiency in India. Though the government’s Open Skies policy of 1992 — which called for the liberalisation of the rules and regulations of commercial aviation to create a free-market environment for the airline industry — coupled with the repeal of the Air Corporation Act, meant that the skies opened up to other private players such as ModiLuft, Air Sahara and East-West Airlines, Jet stood out from the pack. Until 2015-16, it paid among the highest salaries, spending Rs 67.04 lakh annually on each of its pilots. While ModiLuft and East-West ceased operations in 1996, Jet acquired Air Sahara in 2007.
While Jet continued to grow over the 1990s and early 2000s, in 2004, another change in government policy came as a boon for private carriers.
In December 2004, the Union Cabinet approved a proposal of the Ministry of Civil Aviation to allow “eligible” Indian scheduled carriers to operate on international routes. “Only Indian scheduled carriers with a minimum of five years continuous operations and having minimum of 20 aircraft in their fleet will be allowed to operate on international routes,” read the official statement dated December 29, 2004.
With about a decade of flying under its belt, Jet benefited immensely from the policy, which came to be known as the “5/20 rule” and which served to keep its relatively younger competitors such as the now defunct Kingfisher Airlines and Air Deccan out of international operations. In March 2004, Jet Airways and Air Sahara both launched their first international flights on the same route — Chennai to Colombo. In 2016, however, the government scrapped the 5/20 rule, which had been opposed by every new airline in India.
Over the years, as the founder-chairman of Jet, Goyal was able to foster relationships across the international aviation community and also managed to leverage some of these during times of trouble. One such relationship was with the Abu Dhabi-based carrier Etihad Airways, which, aided by relaxed FDI rules, picked up stakes in Jet. Goyal currently owns a majority 51 per cent stake in the airline, with Etihad holding another 24 per cent.
“You should never write off Naresh Goyal,” a senior official in the Civil Aviation Ministry had told The Indian Express last month, around the time that discussions at Tata Group on picking up stake in Jet Airways had gained serious momentum. “He has seen this airline through various seasons and he won’t let it go down without a fight,” the official had said.
23/03/19 Pranav Mukul/Indian Express
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