Unemployment being at a 45-year high it will be disastrous if Jet Airways, with 14,000 employees, is allowed to crashland. The airline suspended domestic and international Wednesday night as the Rs 400 crores it needed immediately to continue operations was refused by the State Bank of India. Hopes had been raised after it was reported that Prime Minister Narendra Modi had asked banks to bail out the airline, but the SBI didn’t oblige. State-owned banks have to be cautious as they may face questions later from vigilance authorities and regulators for perceived malfeasance over losses.
It will be interesting to see what decision is taken on May 10 by the SBI and the consortium of Indian lenders on the bid documents submitted by the airline’s many eligible suitors. Jet’s fate will depend on a viable solution being found, and a quick revival of airline operations that will be a win-win for all parties concerned.
It is imperative that a solution be found, particularly in the ongoing election season, as 14,000 jobs are at stake. Any failure will only add to the PM’s troubles, specially after the notoriety earned over reneging on the promise to generate two crore jobs annually.
As Jet’s fate hangs in the balance, it’s time to review the airline industry’s working. Twelve airlines have gone down in 21 years, for varied reasons. There is cut-throat competition, leading to deep discounting of ticket prices. Airline turbine fuel and parking and landing charges are among the highest in India, not to mention poor infrastructure in cities like Mumbai and New Delhi. There are cases of aircraft parking for the night in Nagpur, not Mumbai, due to overcrowding and steep charges.
