Jet Airways grounding throws up new challenges; new owner won’t find it easy, industry must mend ways

By: | Updated: April 17, 2019 9:10 PM

After groundings spanned over weeks, Jet Airways on Wednesday finally suspended all operations temporarily after its lenders refused plea for emergency funds.

jet airways, jet airways crashed, jet airways lenders reject emergency funding, jet airways air flying permit, jet airways air permit,Employees are likely to be the major losers from this situation. About the future of Jet Airways employees, Parvez Damania said.

After groundings spanned over weeks, Jet Airways on Wednesday finally suspended all operations temporarily after its lenders refused plea for emergency funds. The grounding of one of India’s premier airlines is sure to throw up challenges before the industry, with the immediate ones being to take care of the stranded passengers, and employees left without a livelihood.

The entire aviation sector is in a complex situation now with Jet Airways’ operations coming to a standstill, Parvez Damania, former director Kingfisher Airlines and founder of erstwhile Damania Airways, said. “Even if a new buyer comes, she may have a new strategy and new plan. She won’t be able to absorb all the people currently with Jet Airways. There is a very high chance that people will end up losing jobs,” Parvez Damania told Financial Express Online.

Not an easy flight, for anyone

Jet Airways, flying for 25 years in India and overseas, will operate its last flight tonight, it said in a notice to stock exchanges. The last flight will leave the Amritsar airport at 10:30 pm for New Delhi, per its flight schedule. “Since no emergency funding from the lenders or any other source is forthcoming, the airline will not be able to pay for fuel or other critical services to keep the operations going… and has decided to go ahead with temporary suspension of operations,” Jet Airways said in a regulatory filing.

Employees are likely to be the major losers from this situation. About the future of Jet Airways employees, Parvez Damania said that there is nothing much they can do now. Rival airline, Tata group’s Vistara also weighed in on the situation. “This is not good news for passengers, employees, or for the industry,” Vistara Chairman Bhaskar Bhat said to ET Now.

Future course

Going ahead, Parvez Damania said the government needs to step up in support of new players. The government needs to be very supportive of new airline that comes, Parvez Damania said. The government should have checked when the losses started accumulating, he said. “Whichever airline comes to take hold, it will be a very uphill task for it in the coming times,” he added.

On the other hand, Bhaskar Bhat suggested that the industry also takes onus and improve business practices. Industry ethics need to change, Bhaskar Bhat said. “There was a continuous predatory pricing, and not by any single airline. We have seen several airlines entering and exiting over time, which we haven’t seen in any other industry,” added.

As for the immediate concern of passengers, Bhaskar Bhat called for a concerted effort by the industry as a whole. “All airlines need to rise to the situation and solve passengers’ problems, because they are at the centre of all this,” he said.

Jet miles

On Tuesday, Jet Airways had made a last appeal to the lender for a lifeline of Rs 400 crore. Late last night, Jet Airways was informed by State Bank of India (SBI), on behalf of the consortium of lenders, that they were unable to consider its request for critical interim funding, the airline said in the statement. Following this, the company decided in a board meet to temporarily halt its operations.

In a statement, JetPrivilege said that value of customers’ JetPrivilige Miles are seacure and intact. The customers can redeem JPMiles to fly across more airplanes with same conditions as applicable on Jet Airways and partner airlines, it added.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Switch to Hindi Edition