Time for a requiem for jet airways

It looks like it is curtains for Jet Airways. The airline, now in control of a consortium of creditor banks, had attracted a few bids after it was put on the block. However, it appears most of them have withdrawn from the process. The Abu Dhabi-based Etihad Airways, which has a 24 per cent stake in the airline, was seen as a frontrunner, but it has now backed off. Etihad has its own problems, saddled with stakes in other airlines such as Alitalia and Air Berlin, which have turned out to be duds. 

Others who had expressed interest—sovereign fund NIIF, TPG Capital and Indigo Partners—have also vanished. It is a deja vu moment too as Jet is a reminder of Kingfisher Airlines’ spiral into oblivion laden with `7,000 crore in debt in 2012. In Jet’s last lap, it is the creditor banks that have pulled the plug by refusing to give it a `1,500 crore lifeline and keep its planes flying. As of 17 April, the airline flew its last flight. Since then, the value of the airline has been evaporating. 

Aircraft lessors have assigned their planes elsewhere and Jet’s lucrative flying rights, airport and hangar slots are being redistributed. Except for its brand value and `8,500 crore in debt and money owed to vendors and its 23,000 employees, there is nothing much left of the airline. The government and the courts have added to the confusion as there is lack of clarity on how much Jet equity is up for sale.

The creditor banks are probably right in deciding not to cast pearls before swine. The `1,500 crore lifeline would have kept Jet in the air for a few months but the airline as a business proposition is now irretrievable. The banks may not say it, but it seems they want to cut their losses and call it a day. The best that can be done now is a post-mortem—trace out how and who authorised continuing funding to the dying airline as a lesson for the future.