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India today lives a madness in the world of aviation. Its citizens discover that flying is comfortable, fast and now they also see that it can be cheap. However, in this context, Jet Airways collapsed after 26 years of activity in the local market as the first private airline.
Jet Airways was founded by Naresh Goyal in 1993. Goyal started working in 1967 on the airlines of Lebanon. Later, he was pbaded on to other companies until 1974, he set up his own company, specializing in the commercialization of flights of foreign airlines operating in India. This company was called Jetair, but it had no planes or intentions to do so. He only sold tickets and did marketing.
Goyal then becomes an expert on aviation, especially its marketing. In 1991, India liberalized the aviation market and allowed private companies to operate in the country, ending the monopoly of Air India, a state-owned company. Goyal does not doubt and launches his airline, Jet Airways, in May 1993.
Observe the year well before low cost fever. Jet Airways quickly became India with what was Air Europa or Spanair in Spain at the time. More like Spanair, because Jet Airways was launched for quality service, rather than for its price. In addition to domestic flights, it has expanded to Amsterdam, London and Singapore. An excellent airline, of course. The market has recognized and Jet Airways has grown and developed (Jet Airways: 1,100 pilots on strike)
But, with the arrival of the new century, because of the l & # 39; 39; imitation effect of Southwest, Easyjet or Ryanair, India was beginning to see the birth of low cost airlines. The most important ones are SpiceJet or IndiGo. Here, the battle is not for quality but for the price. The flag is cutting costs, a battle in which Jet Airways was not. But India is India, where the price is very important, so the problems started to increase. On the one hand, the domestic market began to be very difficult for price competition and, on the other hand, the international market was made difficult by the considerable impact that Gulf airlines , and more particularly Emirates, have over India (A death was announced: Jet Airways stops flying.)
Jet Airways appearing in the red, an investor appeared, which certainly had no vision of activity: Etihad. The Abu Dhabi company, which bought shares in Air Berlin and Alitalia, also invested in Jet Airways, which it bought 24% of the capital in 2013. With the support of Etihad, Jet Airways is widening its gulf by buying new planes to meet growing demand. But the underlying problem has remained the same: cost control. Or lack of control, rather. Or, to be exact, insufficient control to compete in a market populated by very aggressive low-cost airlines.
Jet Airways had customers but did not make any money. This accounted for 20% of the market, which in India is an important figure, but the problem is not to fly a lot, but to win with these travelers. And that is what did not happen. The lace was put in 2018 down the rupee against the currencies in which the aircraft are paid, fuel, etc. This led Jet Airways to accumulate a large debt and, above all, to stop paying its suppliers. This year, he started leaving planes ashore because he could not pay his rent to the owners. And that was the inevitable end, because when a plane is left on the ground, the spiral of debt skyrockets: part of the fleet does not generate revenue but costs money. This is the path of disaster (Jet Airways now has only 5 aircraft and requires an urgent rescue.)
Last February, Goyal had to leave the company at the request of creditors, especially banks. It was hoped that this decision would be a fresh money injection and a new management. But the banks have not finished approving this capital increase, they said because they had no certainty about the possibility of reorienting the company in the future. extremely improbable Today, the company does not operate aircraft and debts continue to grow. The capital that banks have not wanted to inject so far is increasing day by day, so the chances of resurgence are minimal.
Jet Airways shares are still listed on the stock market, but their value is practically nil. This week they have fallen to almost nothing. But, some still cling to this minimal possibility of life, more distant every hour that pbades.
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