by Gary Leff on December 10, 2020
India’s Jet Airways collapsed in April 2019. The frequent flyer program lives on because it was spun off as a separate entity, as part of UAE-based Etihad’s investment in the carrier. That let Etihad exercise control and inject cash without running afoul of foreign ownership rules.
Jet became increasingly independent of Etihad as the Abu Dhabi-based carrier has pulled back from its international investments. They hired a Delta Senior Vice President as their new CEO. Then they announced a severing of ties with American as well as with Star Alliance airlines Turkish, Austrian, Lufthansa and Swiss, while becoming closer to Delta and its joint venture partner Air France KLM.
Three years ago it looked like Delta would take a 24% stake in the carrier, but rumors were they wanted more cash from Etihad to do it.
Copyright: boarding1now / 123RF Stock Photo
Jet struggled as investor after investor looked at the carrier, considering the allure of a foothold in the challenging but large and growing Indian aviation market. No one bit. Jet ran out of cash, had planes repossessed.
They were the largest private airline in India, but went the way of the country’s former oneworld carrier Kingfisher. At peak they had a fleet of over 120 aircraft. I predicted at the time of their demise someone might purchase the brand out of bankruptcy and launch a new carrier under the old name.
In fact Jet Airways is being revived with a plan that’s received the blessing of the airline’s creditors. This, however, appears to rely on getting their slots and route authorities back. If and only if that happens quickly, they’ll launch in summer 2021 with a goal to be “the best corporate full-service carrier operating on domestic and international routes.”
- They plan to hub at Delhi, Mumbai, and Bangalore
- Plus “sub hubs” in tier 2 and 3 cities
- And introduce dedicated freighter service, which they think can make money exporting Covid-19 vaccines manufactured in India
India is a big aviation market, but making money on aviation in India is tough. The domestic market has long been saturated by airlines seeking to survive long enough to be permitted to fly internationally, where the government has protected and subsidized Air India. Yields are low and competition on international routes is dominated by Gulf carriers.
Low yield traffic may lead the way out of the pandemic, and if there’s hope for success it’s precisely that Jet Airways sat out Covid-19 in bankruptcy court – they already went bankrupt – and reviving the concept might mean facing scaled back competition, albeit alongside scaled back demand. There’s at least a nostalgia play here though because Jet Airways was once a quality international airline offering three cabin first class suites long before they were cool.