End of runway (Jet Airways crashes)

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 End of runway (Jet Airways crashes)

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• End of the road : As banks became unwilling to give any more money, and no saviours visible (to buy and rescue), it was clearly the end of the road for Jet Airways. So the story of Kingfisher Airlines was, in a sense, repeated (2012).
• Why did Banks refuse : The airlines asked for an emergency funding of Rs.400 crores, but the banks saw that as mere squandering of funds, hence refused. Emergency funding works only when there is a chance of the business bouncing back quickly, and repayment happening.
• Just two months ago : The story was different as Banks tried a bailout for Jet Airways. But the collapse thereafter was precipitous, and in a moment of political uncertainty no one would want to give a blank cheque now.
• Bankers in the crosshairs : A new government may take to task any banker if they deem it fit to do so. Questions are already asked about why the insolvency route was not taken (and bailout was). The NDA 2 govt. was also cagey about not being seen as bailing it out with public money (a bad time for that).
• Calling for bids : Bankers are likely to invite expressions of interest from prospective bidders. But what will they bid for? Huge losses? Debt overhang? Lost routes and slots on airports? Today, the assets seem far less than the liabilities.
• What went wrong : The rescue was started too late. From October 2018, the problems were known, but February 2019 saw the first serious attempt. The founder Naresh Goyal was reluctant to part with control, and that put off the Tatas and even his partner Ethihad Airways. Goyal finally decided to step down, but that was too late.
• Jet's political power : Mr Goyal's political power is well-known, and he used it for keeping others out of the aviation business. Examples - (a) the 5/20 rule - national carriers needed 5 years of experience and 20 aircraft to fly overseas, and (b) FDI restrictions in aviation (till Jet went with Etihad!).
• A bad end : It is all over for the moment, and a great brand has died down. The employees will pay the biggest price.
• Summary : The end of Jet Airways was the result of a series of headwinds, the promoter’s reluctance to let go, and a political season that favoured government’s aloofness.

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