Jet Airways is set to make a comeback after being grounded for three years as the home ministry has granted security clearance to the carrier to resume commercial operations in the country.
Last Thursday, it conducted a test flight to prove to the DGCA that the aircraft and its components are operating normally.
The airline said it was a test flight and proving flights are scheduled to get an air operator certification (AOC).
“Today, May 5, our 29th birthday, Jet Airways flew again! An emotional day for all of us who have been waiting, working, and praying for this day, as well as for Jet’s loyal customers who can’t wait for Jet to commence operations again," Jet Airways said in a tweet on Thursday.
The company earlier this year appointed veteran aviation executive Sanjiv Kapoor, who helped steer SpiceJet Ltd through a turbulent period, as the chief executive officer (CEO). It also appointed former Sri Lankan Airlines CEO Vipula Gunatilleka as the chief financial officer (CFO).
The Naresh Goyal-founded Jet Airways, which operated its first commercial flight on May 5, 1993, flew commercially for the last time on April 18, 2019, as it collapsed under a pile of debt.
Later, it entered bankruptcy proceedings and was acquired by a consortium of UAE-based businessman Murari Jalan and the UK-based Kalrock Capital. The consortium has committed to the funding of $180 million, of which $60 million will be used to repay the airline’s existing dues.
It was one of the largest airlines in India, with a 21.2 per cent passenger market share in February 2016.
It operated over 300 flights daily to 74 destinations worldwide.
The airline went public in 2005 and in 2007, it acquired Air Sahara for Rs 14.5 billion ($190 million); however, the deal fell through in June 2006. In the third quarter of 2010, Jet Airways became the largest airline in India with a passenger market share of 22.6 per cent.
In 2013, Etihad Airways planned to buy a stake in the airline following the government's announcement in September 2012 that foreign airlines could take a stake of up to 49 per cent in Indian carriers. Jet announced it was ready to sell a 24 per cent stake in the airline to Etihad for $379 million. Naresh Goyal retained 51 per cent ownership of the stock.
To take on the rivals, the airline lowered prices and entered into a fare war with low-cost carriers IndiGo and SpiceJet due to falling passenger demand. But it proved fatal for the carrier as it affected its overall performance resulting in steep financial losses.
In February 2016, it was the second-largest airline in India after IndiGo, with a 21.2 per cent passenger market share. Its market share dropped to 17.8 per cent in 2017 and the downward slide continued.
In March 2019 it was reported that nearly a fourth of Jet Airways' aircraft were grounded due to unpaid lease rates. Days later, Naresh Goyal and his wife Anitha Goyal stepped down from the board of directors.
In April, Indian Oil Corporation stopped supplying fuel to the airline, citing non-payment of dues. Subsequently, the airline suspended all flight operations, due to lenders rejecting Rs 4 billion of emergency funding.
On 17 June, after getting no acceptable offers from Etihad Airways and Hinduja Group, lenders to Jet Airways decided to refer the company to the National Company Law Tribunal (NCLT) for bankruptcy proceedings with a debt of $1.2 billion.
The airline's employees were also hit hard as salaries were cut, and several lost their jobs and didn't get their dues from the airline.
The airline has already hired over 200 people across most major functions. The promoters have appointed former SpiceJet and Vistara executive Sanjiv Kapoor as CEO. It also appointed former Sri Lankan Airlines CEO Vipula Gunatilleka as the chief financial officer (CFO).
The airline plans to start commercial operations in the September quarter.
Jet will have to obtain various approvals and certifications before it can start operations.
The hiring for the staff has started but it will also have to invest in the training of staff, cabin crew, and pilots.
Due to the pandemic, the number of domestic travelers has also declined and airlines are struggling with losses. The country’s largest airline, IndiGo, reported a decline in revenue from flights by almost 60% in the financial year 2021.
So, it would not be easy sailing for the airline, at least for the initial few months.
Meanwhile, Rakesh Jhunjhunwala-owned Akasa Air is also likely to start operations soon and the presence of another low-cost carrier may make the survival really tough for the airline.
Besides, it will also take time for Jet to acquire more aircraft to run its operations.
