We all know that recently Jet Airways has been shut down in India. One of the leading airlines in India had to see this crisis. So why did this happen? what were the reasons behind this unexpected downfall? Continue reading to know the details –
Jet Airways – Introduction
Jet Airways was founded by Mr Naresh Goyal and his family in the year 1992 and emerged as one of the leading airline in India. In fact it has been named as one of the top 3 airways in India from the past 10 years.
What led to Jet Airways Crisis?
Increased Competition – In early 2000’s many small budget airlines were introduced in India like Indigo, Spice Jet which automatically increased competition because their fares were very less and that is one of the reason of the crisis because Jet Airways also had to lower their prices and they had to face losses.
Operations Cost – Jet Airways used to provide free services like meals, on board entertainment and at the same time the taxes on their fuel increased which played a huge reason for this downfall and their profit margin decreased
Debt – Due to the above two reasons they started pushing off the salaries of the Jet Airways Employees and also failed to pay off the loan which they took from different banks and the debt increased with time.
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Recent Details Of the Jet Airways News and Bailout Plan
So, One of the many reasons were the inboard complaints of the the passengers which led the business of the airways down from the past couple of years and they failed to pay off the loan of one of the major investors that was HSBC bank which made other investors to back out when they asked for rescue.
SBI bank proposed a helping hand by taking up 50 percent of the stake for 1 INR/- which meant a majority of the stake would have been taken up by the lenders which automatically would have generated new shares but they backed out at the end and their Bailout Plan failed miserably.
Current Scenario and Jet Airways Last Flight
From mid 2018 the airline started lessening their employees. This airline has an employee base of nearly about 22000 employees.
So, on 17th April 2019, their last flight took off from Amritsar to Mumbai and the crew posed happily as you can see above in the picture.
After that many strikes were going on which has been made by the employees as they have no where to go raising a question on the government for this situation.
The airline has suspended their services temporarily with a debt of over 8000 crores.
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