The Indian aviation industry experienced a major blow following Jet Airways' announcement of a temporary shutdown. Industry analysts said the suspension of operations has shaken the country's entire aviation field.
Air India CMD Ashwani Lohani said mismanagement was a contributing factor to the airlines' temporary closure. "It is the airline that invariably remains at the receiving end while all other stakeholders make money," he noted.
Lohani acknowledged that fixing the problem will come with challenges but he reiterated that Jet Airways needs to come down to a solution. He said other sectors in the flight business have also been affected by the shutdown of India's second-largest airlines.
Earlier this year, it was revealed that Jet Airways' executives met up with a number of lessors from other countries including Dubai, Singapore, and Dublin. However, things didn't go as planned, resulting to company founder and chairman, Naresh Goyal, reportedly banging his fist on the table.
The meeting was aimed at building trust with the lessors who flew in to discuss Jet Airways' plans with the funds that it will receive. The company was accompanied by executives from its main lender, State Bank of India. However, the bank reportedly did not provide enough details for the plan.
Some lessors reportedly lost patience due to the lack of details from the borrowing side. "That meeting went horribly wrong," an executive with an international lessor said on condition of anonymity.
Aside from mismanagement, the company's debt pile-up has also contributed largely to the fallout, industry experts said. The Indian jetliner has been working over the past weeks to secure another loan but lenders refused to cash out.
Jet Airways currently has an estimated $1.2 billion bank debt records. Before it made the announcement on Wednesday, the company managed around 600 flights on a daily basis. Over 120 planes operated during its peak but over the last few weeks, multiple flights have been canceled.
The once popular Indian airlines also suffered through intense competition over the past few years. Low-cost carriers such as SpiceJet Ltd. and IndiGo emerged to challenge Jet Airways amid higher fuel taxes and a weakening rupee.
In an official statement released to the public, Jet Airways said it is no longer able to handle operations as funds have dried up for fuel and other services needed for flights to push through. The company also confirmed reports that lenders rejected its requests for emergency funding.
Jet Airways has yet to announce when it will return to full operation or if it will resume flying on particular routes sometime soon.