The Story

Jet Airways, India’s premier international airline, was incorporated in 1992. The company began its services, after it was founded by Naresh Goyal, in 1995. The company went public in 2005 at an offer price of Rs 1,100 per share. Its all-time high went to Rs 1,379 in April 2015. As the Indian government started allowing FDI up to 49% in the aviation industry, in 2013, ETIHAD acquired a 24% stake in Jet Airways for $379 million. Jet Airways acquired Air Sahara. On 12th April 2007, the deal was on the table with Jet Airways agreeing to pay Rs 14.5 billion to Air Sahara. Air Sahara was renamed as ‘JetLite’ on 16th April 2007. In October 2008, Jet Airways allied with the rival Kingfisher Airlines for code sharing on all flights, collaboration on frequent flier programs, and sharing crew and ground handling equipment.

In May 2018, Jet posted an unexpected loss in the fourth quarter of the FY18 of Rs 1,036 Crores. This was their first quarterly loss in all 11 quarters. The company posted another loss in the first quarter of Financial Year-19 due to high fuel prices and announced measures to cut costs by Rs 2000 crores over 2 years. For the first time, the airline deferred payment of salaries of pilots in October 2018 and the company started curtailing operations by grounding 13 planes. In December, the number of cancelled flights went up to 40 per week, and the company staff still worked unpaid. On the cusp of the New Year, Jet defaulted on loan repayment for the very first time. An EGM was convened in February that cleared a resolution plan, including a fresh allotment of shares to lenders. The situation had already turned dangerous as about 50 aircraft have been grounded. Further, as a result of pressure from lenders, Jet chairman Naresh Goyal and his wife Anita exited the airlines. The lenders’ consortium is expected to invoke its entire 51% stake in the airlines to clear their dues. The other equity partner, Etihad, decided to either rescue or cut ties with Jet Airways during a board meeting on 31st March.

As Naresh Goyal and his wife Anita stepped down from Board of Directors, it will generate interest from willing parties like the Tata group, to invest in the airlines. SBI-led domestic lenders agreed to provide an additional emergency funding of 1500 Crores to Jet but the amount curtailed to 200 Crores as SBI awaited an RBI update on the same. This amount has been allocated to facilitate payment of suppliers of Jet in the interim, as the bidding process is initiated.

On 12th April 2019, Jet Airways announced the suspension of all eastern-India bound and all international flights due to a lack of available aircraft. As of 17th April 2019, Jet Airways has temporarily suspended all the flight operations, due to lenders rejecting Rs 400 Crores for emergency funding. Lenders called for EOI (Expression of Interest) while CEO Vinay Dube sought emergency funding. Lenders refused to budge, and the airline suspended operation until an investor is found.