Kushan Mitra: Many of us have been watching the Jet Airways bankruptcy saga with a lot of sorrow. Do not get me wrong – Jet Airways was bled dry by its promoters and management with all sorts of sweetheart deals and, thus, at a level deserved its fate because as the skeletons tumble out of the closet, it has become apparent that some aspects of the airline were a ponzi scheme.
But when 22,000 people lose their jobs, you can’t help but feel a tinge of helplessness. Many of Jet’s more experienced pilots, cabin crew and engineers will find jobs in India’s growing aviation industry. But the collapse of
two airlines in the space of five years with boatloads of debt, as well as the life-support that Air India is on, makes one wonder just how sustainable the Indian aviation sector is.
This is an issue that the next Government will have to debate upon. While the collapse of Jet and the subsequent reduction of capacity will ironically make things better for many airlines, allowing them some amount of pricing power, it will make things pricier for the consumer. Successive Governments have long milked the Indian aviation sector with high fuel taxes, landing charges and airport fees while not allowing Indian carries to operate on more lucrative foreign routes. At the same time, it opened up India to foreign start-up airlines to feed off the riches of the Indian market, something particularly apparent with Arabian and South-East Asian carriers being given a free run in India. The Indian Government should realise that a healthy aviation sector generates and promotes domestic and inbound tourism. This leads to an overall boost of the entire economy.
Jet Airways’ promoters and management, even with their sweetheart deals, were, however, keen on keeping the good times going, quite unlike the erstwhile King of Good Times, whom they had seen off. At the start of Jet Airways’ silver jubilee year, the fact that the airline would not even survive 12 months was the last thing on everyone’s mind. But the signs of trouble were apparent for anyone willing to open their blinkers and see: The airline was in deep financial turmoil, unable to clear salaries of pilots and cabin crew. Now, it is almost certain that the story is over, leaving several banks, led by the State-owned State Bank of India holding the can, which means ultimately, the Indian taxpayer will pick up a large part of the bill.
The fact is that until Jet Airways’ lenders can quickly find a resolution, its revival is almost certainly off the cards. Other airlines are already buzzing around the airline’s body as it lies comatose with some aircraft and assets like slots still in its possession. But the slots will not stay forever as airports have a “use it or lose it” system and aircraft have to be regularly maintained. Most of Jet Airways’ aircraft belong to leasing companies and they also won’t hang around forever with their assets gathering dust. Many aircraft are, in fact, being taken away or being offered to other airlines. Until a rescue happens soon, and soon pretty much means before the end of this month, the plug would effectively have been pulled. As one airline executive muttered, “It would be easier to put a billion dollars in starting a new airline rather than buying Jet Airways.”
But I will always have some fond memories of the airline. I distinctly remember my first flight on Jet Airways, I was in Class XI and was travelling to Mumbai with a theatre production back in 1996. It was a then brand-new Boeing 737-300 aircraft. Many other airlines that had started in the aftermath of the Government opening up the aviation sector to private carriers, were using older, often much older aircraft, such as first-generation jet aircraft like the Boeing 707. Many used second and third-hand Boeing 737-200 aircraft. Jet used relatively new and modern planes like the 300 and 400 series of the Boeing 737. Their air-hostesses spoke well and the entire experience was like a breath of fresh air after decades of Indian Airlines’ domination of the domestic aviation space.
Over the years, I must have flown with Jet Airways hundreds of times on the Delhi-Mumbai sector itself. I was a loyal frequent-flyer and often went out of my way to fly with Jet, and yes, like with every other airline, service standards did drop over the years. There have been several times those services standards on the ground and in the air have been wanting. I have also had cabin crew who has had a “I am better than you” attitude and I have had cabin crew that have gone out of their way to help. When you fly hundreds of times with an airline over the years, there will be some bad experiences along with some superb ones but most of the time, Jet was good. May be that is why, as a frequent flyer, you start getting the first hints that things are not all great, as service standards, including in-flight service, started to drop. Jet clearly could not compete with the likes of low-cost carriers like IndiGo which run a very tight ship and cost controls. And with huge amounts of debt thanks to an ill-advised acquisition of Air Sahara, Jet had swallowed the poison pill to keep Vijay Mallya’s Kingfisher from operating lucrative international routes. This in turn forced Mallya to spend an incredible amount of money to buy Air Deccan, which was quick-acting poison for Kingfisher. But the debt and the complex nature of the Air Sahara acquisition without a unified operating certificate has cost Jet to this day.
I did not believe that a flight I took on February 25 between Lucknow and Delhi onboard a ATR-72 aircraft would be my last with the airline. One can still hold out some hope for the airline’s revival but having seen similar ‘temporary suspensions’ becoming permanent, I would like to thank the airline for all the memories. While I am upset about losing my miles, I do wish all the employees of Jet Airways well and believe that most of them will find jobs even in this difficult economic environment. It was a good quarter-century long ride!
(The writer is Managing Editor, The Pioneer)
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