After Jet Airways Chairman Naresh Goyal stepped down from the board amid with the lenders taking over the firm, industry peers says that it’s a sad day for aviation sector. “Today is indeed a sad day for Indian aviation. By launching a truly world class airline, Naresh and Anita made India proud,” Spicejet CEO Ajay Singh said. SBI Chairman Rajnish Kumar said that due to the differences between the partners Etihad and Jet Airways, the resolution plan could not proceed, adding that Naresh Goyal can return to the firm as a new investor. “Anybody can arrange the funding and negotiate terms as the new investor, including Mr Naresh Goyal. There is no legal bar,” he said in an interview to CNBC TV18. While who will takeover Jet Airways remains to be seen, we take a closer look at the timeline of the carrier since its inception in 1991.
Jet Airways takes off: In 1991, Naresh Goyal started Jet Airways, taking advantage of the opening of the Indian economy and the enunciation of the Open Skies Policy by the government. Jet Airways commenced commercial operations on May 05, 1993.
Growth in the initial years: Soon, Jet Airways gained significant ground growing rapidly, even as other private airlines were struggling for survival. A decade later in March 2005, Jet Airways debuted on the stock exchanges by selling 20 per cent stake for about Rs 1,100 a share. Jet Airways shares listed on NSE at Rs 1,155 making Naresh Goyal’s net worth top Rs 8,000 crore.
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Air Sahara deal: In January 2005, Naresh Goyal’s airline bought out Air Sahara for around Rs 2,200 crore. As part of the deal, it received 27 aircraft along with 12% of market share and international routes. Later, the firm was renamed as Jet Lite.
IndiGo gains traction: Amid cut-throat competition in the industry, Jet Airways lost market share and low-cost carrier IndiGo started gaining significant traction. The firm resorted to a lot of layoffs in a bid to cut costs. In July 2012, IndiGo overtook Jet Airways in the domestic market share, ET Now reported.
Etihad deal: Soon, Naresh Goyal led Jet Airways was able to successfully conclude a strategic partner deal with Etihad Airways. Etihad picked up a 24% equity stake in Jet Airways in November 2013. Naresh Goyal retained 51 per cent stake.
Mounting losses: The airline was going through rough times, as it reported successive quarters of losses in 2018, and was unable to clear salaries due to pilots. Earlier this year, the airline delayed payments to banks, following which the company sought $840-million bailout from the shareholders. Last month, the shareholders approved the conversion of loan into equity.
Resolution plan: Finally, the lenders finalised a resolution plan for the airline, and agreed to infuse Rs 1,500 crore interim funding for a period of 2 months. Naresh Goyal and Anita Goyal stepped down from the board, with Jet Airways looking for a new investor.
Sharing his vision for a period after two months for jet Airways, Rajnish Kumar said that the best case scenario is that the airline is running at full capacity, jobs of 23,000 employees has been protected, and the lenders sacrifice is not higher than the equityholder’s sacrifice. “This is my wish, but there is no guarantee,” he told in an interview to CNBC TV18.
