We are a few hours away from knowing whether the oldest private carrier Jet Airways would get an investor or not.
Jet Airways lenders are scheduled to meet later today and are expected to announce a winning bidder for the airline. All employees, stakeholders and aviation enthusiasts are desperately waiting for that announcement from SBI Capital Securities. The decision will bring major changes to the Indian aviation market. Either it will be the first page of a new chapter or the last page of the final one. Till we find that out, let's take a look at what happened at Jet Airways in the last 26 years. 1) Jet Airways (India) Limited was incorporated on April 1, 1992, as a private company with limited liability. It started operations as an air taxi operator on May 5, 1993. In the first year, the airline operated 28 daily flights to 12 destinations in India with a fleet of four Boeing 737-300 aircraft, leased from Ansett Aviation, Australia. 2) By the end of 2003, Jet Airways had a fleet of 41 aircraft that operated over 250 flights daily. Jet Airways was listed on the Bombay Stock Exchange and became a public company on 28 December 2004. > Judgement day for Jet Airways as bidding closes today 3) In 2007, Jet Airways bought Air Sahara, which is seen by many industry experts as its first big mistake. Seen as a move to take on emerging low-cost carriers, the move continued to put a lot of pressure on the airline’s balance sheet year after year.
In the same year, the airline started inducting a mixed fleet of wide-bodied aircraft-B777-300ERs and the A330-200s. This meant increased costs for engineering, maintenance and operations.
4) In 2013, it forged a strategic alliance with Etihad Airways, becoming the first beneficiary of a policy change that allowed foreign airlines to invest in domestic ones. Etihad Airways bought 24% stake for $379 million. 5) Shortly after shifting its international base from Brussels to Amsterdam in the spring of 2016, Jet Airways signed an ‘Enhanced Cooperation Agreement’ with codeshare partners Air France and KLM Royal Dutch Airlines in November 2017.
The journey has increased from four aircraft in 1993-94 to 119 aircraft, from 12 destinations back then to 65 destinations and from 24 daily flights in 1993-94 to over 650 departures and arrivals
6) Aggressive competition from low-cost carriers resulted in a low-yield scenario and days of high oil prices and rupee depreciation made matters worse. It is also an open secret that the promoters of the airline exercised total control and interfered substantially in the decisions taken by the professional hires. 7) The airline posted a net loss of Rs 1,036 crore in March 2018 quarter, then a net loss of Rs 1,323 crore in June quarter, then a net loss of Rs 1,297.46 crore in September quarter and further in December quarter, a net loss of Rs 587.77 crore. 8) The airline could not pay the salaries to pilots, engineers and senior management on time since August. As of date, all employees are unpaid since March while pilots, engineers and senior management have not been paid since January. 9) In February, Jet's Board of Directors considered and approved a Bank Led Provisional Resolution Plan (BLPRP), which estimated a funding gap of around Rs 8,500 crore (including proposed repayment of aircraft debt of around Rs 1,700 crore). 10) Naresh Goyal stepped down as chairman and from the board of directors on March 25. His wife Anita Goyal and Etihad’s nominee also stepped down from the board. Banks announced funding support of up to Rs 1,500 crore by way of issue of debt instrument against the security of its assets. 11) The bidding process was initiated by lenders for finding a new investor(s) and the process was expected to be completed in June quarter. Lenders then invited EOIs for 31.2-75 percent stake in the airline last month. 12) Jet Airways started grounding fleet by at least a dozen since February as it was unable to pay lease rentals. Lenders refused to provide interim funding to the airline. From 119 in Jan, the airline’s active fleet size came to 5 in April and it suspended operations for an interim but indefinite period on Apr 17.