The Real Reason Behind Jet Airways Bankruptcy! 👇🧵 
1/ The Promise:
In 1993, when Indian aviation was still a state-run monopoly, a travel agent named Naresh Goyal launched Jet Airways.
The pitch? A world-class, full-service airline that could compete with global giants.
In 1993, when Indian aviation was still a state-run monopoly, a travel agent named Naresh Goyal launched Jet Airways.
The pitch? A world-class, full-service airline that could compete with global giants.
2/ Jet offered hot meals, polished service, punctual flights - the kind of experience corporate India craved but never got from Indian Airlines.
3/ By the mid-2000s, Jet wasn't just flying - it was soaring. It had 40% domestic market share, flew to international destinations, and was the airline of choice for business travelers and Bollywood alike. Jet wasn't a company. It was a status symbol.
4/ The Rise:
Jet set the standard for what Indian private aviation could look like.
First Indian airline to operate a large fleet of Boeing 737s.
Offered seamless connections between metros and Tier 2 cities.
Expanded into international markets at a time when competitors were still figuring out domestic routes.
Jet set the standard for what Indian private aviation could look like.
First Indian airline to operate a large fleet of Boeing 737s.
Offered seamless connections between metros and Tier 2 cities.
Expanded into international markets at a time when competitors were still figuring out domestic routes.
5/ By 2005, Jet had listed on the stock exchange.
Its valuation soared.
And Naresh Goyal the man who once couldn't afford to buy a plane ticket - now controlled India's biggest private airline.
Its valuation soared.
And Naresh Goyal the man who once couldn't afford to buy a plane ticket - now controlled India's biggest private airline.
6/ The Fault Lines:
Despite its premium image, Jet was structurally fragile.
Here’ s why:
Despite its premium image, Jet was structurally fragile.
Here’ s why:
7/ a. Cost Structure Misfit
Jet operated as a full-service carrier in a country where 70% of air travel is price-sensitive.
IndiGo, GoAir, and Spice et began capturing the bottom of the pyramid. Jet tried to respond by launching JetLite (after acquiring Air Sahara), but never truly embraced the low-cost model.
No pricing edge. The result?
High operating costs and Mixed branding.
Jet operated as a full-service carrier in a country where 70% of air travel is price-sensitive.
IndiGo, GoAir, and Spice et began capturing the bottom of the pyramid. Jet tried to respond by launching JetLite (after acquiring Air Sahara), but never truly embraced the low-cost model.
No pricing edge. The result?
High operating costs and Mixed branding.
8/ b. Disastrous Acquisition
Jet bought Air Sahara in 2007 for $1,450 crore - to gain access to international flying rights and market share.
But the merger was chaotic:
Different aircraft, operations, systems, staff cultures
Sahara was already bleeding losses
JetLite failed to attract budget-conscious fliers Instead of synergy, Jet inherited a loss-making mess.
Jet bought Air Sahara in 2007 for $1,450 crore - to gain access to international flying rights and market share.
But the merger was chaotic:
Different aircraft, operations, systems, staff cultures
Sahara was already bleeding losses
JetLite failed to attract budget-conscious fliers Instead of synergy, Jet inherited a loss-making mess.
9/ c. Debt Spiral
To fund expansion, Jet borrowed aggressively.
It didn’t help that:
- oil prices were rising
- the ruppee was weakening
- Jet didn’t hedge fuel costs
Over time, debt ballooned to 38,500+ crore. By 2018, Jet was losing £20 crore every day.
To fund expansion, Jet borrowed aggressively.
It didn’t help that:
- oil prices were rising
- the ruppee was weakening
- Jet didn’t hedge fuel costs
Over time, debt ballooned to 38,500+ crore. By 2018, Jet was losing £20 crore every day.
10/ d. Founder Control
Goyal owned only ~25% of Jet, but controlled it via holding companies.
Even when investors (like Etihad) came in or lenders demanded governance changes, Goyal refused to give up control.
There was no CFO-level empowerment. No second line of leadership.
No professionalisation.
The airline was run like a family business in a hyper-competitive global industry.
Goyal owned only ~25% of Jet, but controlled it via holding companies.
Even when investors (like Etihad) came in or lenders demanded governance changes, Goyal refused to give up control.
There was no CFO-level empowerment. No second line of leadership.
No professionalisation.
The airline was run like a family business in a hyper-competitive global industry.
11/ The Crash:
In 2019, with unpaid staff, grounded planes, and vendor defaults, banks finally issued an ultimatum:
Goyal had to step down or let the airline collapse.
In 2019, with unpaid staff, grounded planes, and vendor defaults, banks finally issued an ultimatum:
Goyal had to step down or let the airline collapse.
12/ He stepped down in March.
By April 2019, Jet Airways shut operations.
Lessors seized planes. Employees were left unpaid. Shareholders were wiped out.
The airline that once hosted celebrities and heads of state had fallen to pieces.
By April 2019, Jet Airways shut operations.
Lessors seized planes. Employees were left unpaid. Shareholders were wiped out.
The airline that once hosted celebrities and heads of state had fallen to pieces.
13/ In Indian aviation, sentiment can launch an airline - but only discipline can keep it flying.
14/ This week @finshots will be covering why most airlines fail to take off in India's aviation sector.
Which story should we cover next?
Let us know in the comments and follow along for more!
Which story should we cover next?
Let us know in the comments and follow along for more!
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