On Saturday, I wrote about the decision to hand over the reins of Jet Airways to a new promoter set which consists of an asset manager from London and an Indian entrepreneur from Dubai, after the Jet Airways Revival Plan presented by them was approved by the Committee of Creditors. The ink is not even dry on this yet, given that there is still the blessings of the Government of India that this deal needs to receive, but there are many people excited about this proposition. I’m here to tell you to hold your horses.
We know nothing at this point of the airline plans from the new owners. Everything is in whispers, and the most I’ve heard is that these new owners would like to start up Jet Airways as a full-service airline again. No press conference yet, or a public conversation about the plans of this airline. So, we should wait up for that to happen.
First and foremost, the airline will need to find themselves a management team. There is no certainty that ex-employees will return to the airline, and neither is there certainty that they will be absorbed. So, there has to be a good reason for anyone to take a leap of faith with the airline at this point.
Second, they need aircraft. From a fleet of 120 aircraft or so, the airline is down to 6 Boeing 777s, a handful of A330s and Boeing 737 aircraft. Clearly, if the airline wants to restart as a domestic airline, they will need to go and find them some aircraft. This could be an airline that prefers the A320s to the 737s, maybe? What if Jet Airways wants to call Boeing and say they want their 205 aircraft order back on the books. There are quite a few of undelivered 737 MAX aircraft in Jet Airways colours still there at Boeing’s facilities in Washington, USA, and aircraft redelivered to GECAS are stored there too. Will Boeing take the call?
The new Jet Airways will have to work out a lot of things, for instance, the size of the cabin, the cabins they will operate with (J/Y or J/PEY/Y) and what will be the service standards, and will there be a loyalty programme or not and so on. While there has been some maintenance done on these aircraft, they definitely need work before they are airworthy.
Third, they need slots. Their prime bank of slots, domestic and international, has been given away. There might be some slots left, but most are gone and divided up between other domestic airlines. On the international front, it would be a long way before they can make any meaningful presence again. Although if they started with flying international first with those 777s, do they still have the rights to fly abroad in the first place? You need 20 aircraft in your fleet to be anywhere close to that restart.
Fourth, you need money, lots of it. Restarting this airline will need a lot of money in the upfront stage to invest in the product and the airline.
Fifth, you need luck. The Indian preference for no-frills airlines and buying at the cheapest cost is well-known. All it takes is to amp up the discounts a bit more, and most passengers switch to the lower price on the route, service be damned. So, if an airline continuously kept prices low, would you get on a Jet Airways plane or the other airline? Most people know the answer. So however they do they take on the competition, they need a bit of luck by their side.
However, the good news is, they already might be getting lucky. CoVid-19 has caused airlines across India to haemorrhage money, and maybe someone will go under as well, eventually. After all, there are at least three weak airlines in India, and one is on sale, one is booking compensation income to keep itself afloat, and one can’t keep top management at the helm to keep it going. Another no-frills carrier might have to shut shop or merge due to promoter issues. So the landscape for an airline which won millions of hearts before might clear up sooner than you think.
The bottom line is, there are more questions than answers right now, so keep your hopes low. As for your salaries and refunds being paid, there is no clarity on that, so let’s not attempt to answer that question at this moment.
What do you think will Jet Airways 2.0 look like? Will just the brand be enough to bring back people in droves to this new wine in an old bottle?
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