| 3 minutes read

3 minutes read

What Impact Jet Airways Fall Will Have On The Indian Aviation Sector

| Published on April 18, 2019

It is over time that the Jet Airways have stopped all operations in the aviation sector due to a $1.2 billion funding gap. So, naturally, it turns out to be a billion-dollar question that whether Jet Airways would opt for the airlines again if it manages to turn around its fortunes.

Whether Jet Airways should survive at all?

Since being a 25-year-old private airline, this happens to be a much bigger question. The reason why this question arises is that the company’s liquidity constraints have risen to the extreme, and subsequently Jet’s life is hanging by a thread.

The major worries of the experts are, who will fill the gap in capacity if Jet were to die.


If suppose, Jet Airways exits the aviation industry, there would be large impacts on these two facets:

1. Global

a. Jet Airways have a significant share in the international segment of the Indian aviation market and account for about one-third of the total ASK (Available Seat Kilometres) of Indian carriers on scheduled international services in 2018.

b. It is absolutely possible that Air India and Air India Express can plug that gap, but there is no surety that the passengers would choose Air India instead of choosing other foreign carriers like Emirates, British Airways Plc, Singapore Airlines Ltd., Etihad Airways PJSC, etc.

c. Moreover, the most important thing is that Jet Airways had bilateral rights and slots with some coveted international aviation markets, which are difficult to get. So, even if the set up of the game on the international front is possible, it is not going to happen overnight and resultantly the plugging of such gaps will be the most interesting development to watch out for in the coming days.

2. Domestic

a. IndiGo happens to be the company which can take advantage of the situation of the grounding of Jet Airways. It has already doubled its international market share to 8 percent on the short-haul routes.

b. It happens to be such, IndiGo is in a strong position to capitalize on Jet’s plight and give a flight to its international ambitions. Earlier, when Kingfisher got down, Jet Airways had the opportunity to take advantage of the situation, but it never had the balance sheet strength, which is not the case with IndiGo.

The Party is over for the Indian Consumers?

With the financial woes and massive scaling down of operations of Jet Airways, Indian passengers have to end up as the biggest losers.
• The situation aroused when the industry is in dire need of capacity rationalization to give a fillip to airfares.
• The crises have also sucked some capacity out of the market.
• The squeeze on capacity has led to an increase in fares of the airlines.

The Ultimate Question

Seven years ago, Kingfisher dropped down. Now it’s the turn of Jet Airways. Who is going to be the next one?

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