October 21, 2019
Latest News

Financial turbulence hits Jet Airways, once a trailblazer of India’s aviation

By Sarwar Kashani,

New Delhi, Apr 18 (efe-epa).- India’s Jet Airways on Thursday halted all its operations after it failed to secure interim funding for a bailout of the cash-strapped airline that once was the largest carrier by passenger market share in the country.

The announcement to cancel all its international and domestic flights, with its last flight operating on Wednesday, came weeks after the airline, weighed down by a financial burden of $1.2 billion, began its last-ditch effort to secure a rescue funding of $217 million from its lenders.

But the carrier failed, collapsed and decided to shut down, albeit temporarily, leaving its nearly 20,000 employees in limbo.

“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. Consequently, Jet Airways is compelled to cancel all its international and domestic flights. The last flight will operate today,” the carrier said in a statement released on Wednesday evening.

This brought the curtains down on an airline that was among India’s first private carriers after the government opened the civil aviation sector in the early 1990s and ended the monopoly of state-owned airlines.

Jet Airways quickly soared high in the skies after it began its operations. During its peak in the last nearly 26 years of its existence, the airline flew more than 120 aircraft and operated over 600 daily domestic and international flights.

Known for its slogan “The Joy of Flying,” the carrier's gloomy end began last year as revenues dwindled amid uncontrollable fluctuations in global crude prices and a bitter price war among budget airlines in a country filled with price-conscious fliers.

The crisis for the carrier, which used to charge premium for its full-service offerings, worsened as the Indian rupee kept nosediving, touching a record low of nearly 75 rupees per United States dollar last year.

The weakening rupee caused a further hike in aviation turbine fuel costs, which has affected all Indian carriers.

While other cash-rich carriers flew through the turbulence, Jet Airways, which from 2010-12 remained India’s largest carrier by passenger market share but vexed by a group of low-cost competitors, was forced to fly by night.

The chaos is partially also blamed on “bad management” led by its founder Naresh Goyal, who stepped down last month as chairman of the company after showing significant losses in the past few years.

Its share of the domestic passenger market has also fallen to about 15.5 percent in 2018 from 22.5 percent four years ago.

Captain Asim Valiani, the vice president of the National Aviators Guild, an association of over 1,000 Jet Airways pilots, told EFE that some 20,000 employees of the carrier have been let down not only by its promoters but also by the government.

“Yes, some blame has to go to the management also. But they are not entirely responsible,” Valiani said.

He said India’s aviation sector, the third-largest in the world, is generally ailing because of high taxes levied on airlines.

According to a government report released in March, domestic air passenger growth in India has already lost its momentum, registering a growth of 5.6 percent in February – the lowest in four and a half years. The last time such a slow growth was reported was in July 2014.

However, since September 2014, the aviation market has been logging a double-digit growth and the trend continued until December last year. But in January this year, the growth dipped to 9.1 percent and slipped further in February.

The depleting growth led to almost all major airlines truncating their schedules. And obviously, Jet Airways was the worst hit.

“This is the state of the aviation market, which is competing to be second-biggest now,” Valiani said.

He said the Jet Airways employees were requesting the government to help the airline with the minimum required funding so that it becomes operational again.

“We have five potential buyers already who have expressed interest in buying the airline," he said. "But we have to make it functional first.”

Valiani said that if the government could pump huge money into the loss-making Air India, the state-owned carrier, “why can't they help an airline which has a potential to rise up again?"

“It is not only the question of 20,000 employees. There will be unimaginable ripple effects for the entire sector and its allied sectors,” the captain said.

ssk/dl

News history
Tesla stock has risen this month as its 3rd-quarter numbers approach

By David Marino-Nachison

Australian Navy begins sea trials of 3rd air warfare destroyer

Sydney, Australia, Sep 16 (efe-epa).- Australia has begun the first phase of sea trials of its third and final Air Warfare Destroyer, the Department of...

Nissan Motor CEO steps down in the wake of bonus scandal

Tokyo, Sep 16 (efe-epa).- Hiroto Saikawa stepped down from his post as chief executive officer of Nissan Motor on Monday and has been replaced by Yasuhiro...

Trump says US is "locked and loaded" to respond to attack on Saudi oil

Washington DC, Sep 15 (efe-epa).- The president of the United States on Sunday warned that his administration was "locked and loaded" to respond to a recent...

Nissan CEO steps down over bonus scandal

Tokyo, Sep 9 (efe-epa).- Nissan Motor's CEO, Hiroto Saikawa, will step down on 16 September on the back of an investigation into over payments the executive...

Volkswagen to pay multi-million-dollar settlement over 'dieselgate' Australia

Sydney, Australia, Sep 16 (efe-epa).- German car giant Volkswagen has agreed to pay millions in compensation to those affected by its diesel emissions...

General Motors braces for first nationwide strike in 12 years

Washington DC, Sep 15 (efe-epa).- The United Automobile Workers trade union on Sunday called for a nationwide strike of 48,000 employees at General Motors,...

Mexico seeks to topple Brazil's Volkswagen Guinness World Record

Puebla, Mexico, Sep 15 (efe-epa).- The Mexican state of Puebla over the weekend attempted to take the Guinness World Record for the most Volkswagen vehicles...

Argentina's gov't to present new budget amid economic woes

Buenos Aires, Sep 15 (EFE).- Finance Minister Hernan Lacunza will present the proposed 2020 budget to the Argentine Congress this week, a budget that will...

World's biggest oil producer reduces output by 50 percent after Saudi attacks

By Suleiman al-Assad

Battle to power electric vehicles reaches Sweden

By William Boston

Are central banks losing their clout?

By Randall W Forsyth

Ecotourism, the answer to Latin America's rural development needs

By Maria Jose Brenes

Havana-based cigar maker says it doesn't foresee Helms-Burton lawsuits

Havana, Sep 13 (efe-epa).- Habanos S.A., a Spanish-Cuban joint venture that is a leading maker of Premium cigars, said Friday it does not believe it is at...

US pledges to increase trade with Brazil, without mentioning bilateral deal

Washington, Sep 13 (efe-epa).- US Secretary of State Mike Pompeo promised his Brazilian counterpart here Friday that exchanges of goods and services between...

Mexicans make drinking straws from reeds to curb use of plastic

Jose de Jesus Cortes

London, Sep 13 (EFE).- The London Design Festival returns this weekend to the British capital with events and facilities bringing together the best of the...

China exempts US soy, pork products from tariffs ahead of US negotiations

By Paula Escalada Medrano.

Vaping giant Juul Labs debates pushing back on US' new ban on e-cigarettes

By Jennifer Maloney

Trump's plans for oil drilling in Arctic refuge clear big hurdle

By Timothy Puko

IMF: US-CHINA TRADE WAR STARTING TO WEIGH ON GLOBAL ECONOMY

Washington, Sep 12 (efe-epa).- The International Monetary Fund said Thursday that the trade war between the United States and China is already triggering a...

Argentina’s obsession with the dollar, a vicious circle amid a crisis

By Rodrigo García

New tariffs applied on Chinese imports to the US

Beijing, Sep 12 (efe-epa).- China's Customs Tariff Commission of the State Council has postponed the planned 25 percent tariffs on 16 products from the...

EU's top diplomat visits Mexico to boost trade agreement

By Eduard Ribas i Admetlla

I agree Welcome to news4europe.eu. We use cookies to improve your online experience. Find out more.