Page 54 - 31JAN2018E

What ails Jet

Airways?

When Jet Airways — under its “Global Sale” platform running
from January 5 to January 11 — offered up to 50 per cent
discount on domestic and international flight bookings, it
appeared that the flier is in its pink of health. However, a little
digging into its working and we found that all is not well with
the airlines, writes suman
fter defaulting on pay- lessors on time? Why is the 25-year-old
ment of salary to its senior airline is in financial strain and has out-
management along with standing dues of about $400 million?
pilots and engineers, loss- Did jet delay pre-delivery payments to
A making carrier Jet Airways the Seattle-based aircraft maker as well
has failed to disburse even the salary as to Airbus SE?
to some categories of employees. This It is learnt that the airline is in talks
includes salaries to managerial with Etihad a second time and with
employees and those above. In fact, the Indian conglomerate Tata Sons for
Airline has not been paying salaries fresh funds or a stake sale. When Goyal
on time to about 15 per cent of its over launched Jet Airways in 1993, air trav-
16,000 staff since August according to el in India was at a nascent stage. He
highly placed sources. gave it a major push with his visionary
Inquiries from Jet Airways on the approach.
telephone were not answered and Having 124 planes, Jet Airways now ed rising, Jet was back in trouble again.
finally, a Jet spokesperson on condition flies to places like Hong Kong, Dubai, According to information available,
of anonymity said: “Jet would like to Paris, and London, besides over 45 des- the airline defaulted on a debt payment
clarify that except for informed groups, tinations in India. As Chairman of Jet to a consortium of banks led by SBI on
all salary payments are up to date.” Here Airways, Goyal holds a 51 per cent stake January 1. It reported three consecutive
remains a catch that is this “informed in the airline with his wife Anita still on quarterly losses of over 1,000 crore
group”. the board. each since the quarter ended March
What ails Jet Airways? We tried to 2018. In September 2018, the airline had
probe and found that Jet Airways owes What went wrong? informed its overseas lenders that it
its existence and meteoric rise to its It is learned that the SBI, the lead banker would raise about 3,500 crore over six
founder Naresh Goyal. The man who for Jet Airways, has ordered a forensic months through a stake sale in its loy-
started out as an assistant in a travel audit of the company’s books for the alty programme called Jet Privilege and
agency made it to country’s biggest period between April 1, 2014, and March pump in fresh funds into the company.
service carrier. Be it his charm, connec- 31, 2018. It coincides with Etihad pump- However, it has not happened and the
tions or business acumen, the Airline ing in over 2,000 crore for a 24 per airline is yet to find fresh funds or mon-
touched the newer heights. cent stake in the company just before it. etise its stake in its loyalty programme.
Has he lost that Midas touch? Or his The question is why Jet Airways did not There was more trouble for the com-
days and times are over now? Is this the survive despite 2000 crore investment pany with Kardassis quitting at a time
moment of truth for its founder Naresh by Etihad. It survived only for sometime when restructuring was underway
Goyal? Why is Jet strapped for cash and till low oil prices prevailed in the global spoken volumes about something seri-
unable to pay even to its employees and markets. No sooner, the oil prices start- ous ailing the carrier. The man who was

Tehelka / 31 january 2019 54 www.Tehelka.com