The early signs of distress in
Jet Airways were visible in the July to September quarter of 2018. While the airline was gloating over the induction of Boeing 737 MAX8 aircraft – its first new induction after ages — there was little to cheer on the financial side.
One of the principal casualties of the financial duress was the international network. It was a chicken-and-egg situation for Jet — international routes were critical for the airline to stay aloft as they accounted for more than 50 percent of revenues in the preceding quarter, but the debt-laden airline did not have the cash or the planes to persist with these routes.
As of last weekend, the airline closed reservations of its long-haul wide-body operations to Amsterdam from Mumbai, Delhi and Bengaluru, to London from Mumbai and Delhi and to Paris from Mumbai and Chennai, leading scores of passengers stranded. From what was restricted to airports in India, the Jet Airways crisis was going global. This was followed up by the news of Etihad Airways taking away the three pair of slots it had leased to Jet at London Heathrow – one of the handful of airports in the world that allow slot trading.
Over the years, Jet had built a formidable international network. This included the flights to the Middle East from multiple points in India, its long-haul network to North America – first via its hub at Brussels and later from Amsterdam and its four daily flights to London.
The withdrawal of international services also marks an almost end to its wide-body operations led by the B77W aircraft, the first of which was inducted in mid-2007. Unfortunately, the aircraft arrival coincided with the downturn of 2008-09 and the airline, for the most part, had the planes being leased to Etihad, Turkish, Gulf Air and Thai Airways. When the entire fleet was back at the beginning of winter schedule in 2017, the airline re-started its aggressive expansion only to hit a roadblock within a year.
The void on the international sectors is even bigger than domestic front where growth was largely driven by capacity induction. Long-haul international has seen steady growth and minimal capacity rise from India.
While the domestic routes are being quickly filled up by rivals, such options do not exist for international. Vistara – the other full-service carrier which has been granted permission to fly international — is awaiting delivery of its B789 Dreamliner aircraft. IndiGo has not taken any steps towards inducting wide-body aircraft and SpiceJet has evaluated the planes in the past but has stopped short of induction. On Monday though, SpiceJet said it will
launch a number of international flights from Mumbai.
Air India, which is already grappling with the airspace closure over Pakistan and grounding of few B787s, does not have the means to pick up this slack.
This gives the business out of India on a platter to foreign airlines. But this also impacts passengers. Jet Airways has been operating to 10 sectors, which were monopoly routes. There simply wasn’t another operator who flew non-stop.
These include standalone routes like Pune–Singapore as well as flights to its equity partners hub Abu Dhabi from Pune and Lucknow. In addition to this, there are eight routes that had Jet Airways as the only Indian carrier, with most of them being from Mumbai.
Passengers will have a lesser choice and with capacity gone out of the market – higher fares to tackle to book flights out of India. Will these services resume?
A lot depends on what happens with the Express of Interest (EoI) and subsequent negotiations between the consortium of bankers and the possible partner. However, routes like those to London could well be considered as good as gone and it comes at a time when a lot of people would have booked the airline for traveling to the Cricket world cup due soon in England.
The government has neither suspended the airline’s Air Operators Permit (AOP) nor grounded the airline. So taking away the bilateral rights of the airline has not been in question yet.
But sooner than later, if funding does come in the resumption of international services is a distant dream. But if the funding comes, how will the resumption proceed? Not all flights would be back from the word go.
The re-induction of planes, re-working of schedules, permissions and adequate period of time to sell the flights to ensure that they fill up will mean that it will take about 25 days or more for the flights to be operational on International sector, except for those to Amsterdam which sees a good number of passengers connect thanks to its partner KLM.
Until there is clarity on when the services resume and if they resume, passengers have little alternate options. In codeshare operations, there is a booking carrier (the airline which has processed the ticket) and an operating carrier (the airline which actually operates the flight) and if the passenger is lucky to have its Booking carrier to be one of the partner airlines of Jet Airways, there are high chances that the airline will re-book or make alternative arrangements.
If the passenger happens to fly one of the partner airlines of Jet Airways on a ticket booked by the airline, the passenger is good to travel but if the operating carrier is Jet Airways and the ticket is booked by Jet – you are in a soup. The airline is so far responding to messages on social media and calls but there is no re-booking and it will be wise to re-book yourself at the earliest before fares hit the sky.
Ameya Joshi is the founder of aviation analysis blog NetworkThoughts.