Jet Airways is one of India’s largest full-service carriers. Recent setbacks have cost Jet Airways much needed financial security amid a time of booming air travel in India. Much like rival Air India, Jet Airways has entered a bit of a cash crunch that has put their airline on the verge of bankruptcy, and the situation doesn’t seem to be improving.
More Jet Airways aircraft have been grounded as the airline struggles to pay leases and interest for them. In its latest report, Jet Airways announced an additional four aircraft groundings due to an inability to make payments.
Currently, Jet Airways has a massive amount of debt to deal with. A while back, they announced a deal to restructure with a focus on profitability. It has been close to a month since the deal was announced, and it seems no progress has been made so far. Meanwhile, Jet Airways are still unable to cover their expenses.
Beleaguered shareholder Etihad also remains big in this picture. It is unknown whether or not Etihad will make another investment in the airline to help it stay afloat. They themselves are grappling with financial problems, leaving few options left to help Jet Airways.
While a merger with Air India could help, it doesn’t seem like that was ever a realistic possibility. Jet Airways, it seems, are almost out of options.
Jet Airways has around 120 aircraft in their fleet. Of that number, 42 aircraft have been grounded because of defaults on lease payments. With one-third of their fleet out of service, Jet Airways is straining to maintain a robust flight schedule.
What will happen to Jet Airways?
Jet Airways needs cash and they need it soon. If they continue to ground aircraft at this pace, they soon will have no airplanes left to fly. Without a solid route network, Jet Airways will struggle to turn a profit to pay back their debts.
As of now, Jet Airways is awaiting the implementation of a restructuring plan. Hopefully, that will begin a turnaround to save them from bankruptcy. Should they go bankrupt, it would be another high profile loss in the aviation world.
Delta Airlines intended to start flying to Mumbai, a Jet Airways hub, in 2019. If Jet Airways were to go bankrupt, Delta would be unlikely to start this route as they wouldn’t have a partner in India anymore. However, some airlines may benefit from limited competition to major hub cities.
Up and coming carrier, Vistara, intends to start long-haul operations soon. If Jet Airways were to exit from the market, their only competition would be with ailing Air India. While Jet Airways doesn’t have a cutting edge business class product, the direct aisle access on their widebodies does beat some of Air India’s tight seating configurations.
Vistara, with backing from Singapore, could take over some of Jet Airways’ assets and routes and launch themselves as India’s premier full-service airline.
Simple Flying will be watching the situation at Jet Airways closely. We hope that they can remain flying for some time, but it seems like unless they can find the cash they need soon, bankruptcy could be in the cards.
Have you flown with Jet Airways? Do you think Jet Airways will survive? Let us know in the comments below!