Recently Jet Airways, one of India’s oldest and strongest private players in the aviation sector had announced it had the capital to work till the next 60 days. This news had hit the industry hard pointing to a single question where has it all gone wrong. Why are companies having this much experience in this field facing such a situation? The answer to this stringent question perhaps has an easy answer.
The Indian aviation market is one such market having cut-throat completion and is one of the most expanding markets as the middle-class strata of the economy are now trying to switch to aircraft for their travel but the clause in that is that they prefer the most affordable airlines. This is the proof because of which the Indian airline industry is one of the biggest purchasers for single-aisle aircraft made by Boeing and Airbus. Other players in the market like Indigo, Go Air have capitalized on this situation to provide ultra-low fares to the customers and are trying to grab as much market share possible. Indigo is the market leader with a whopping 38% while Jet Airways have a second position with 18% of the market share.
Jet Airways may be going on the path of Kingfisher Airlines which was also a premium airline that could not handle the stiff competition and low fares from the other players and eventually had to close its operations. Among all this chaos the rising fuel prices had hit hard Jet Airways cornering them from all sides. Jet Airways have a debt of Rs 94.3 Billion and have cash and other equivalents of Rs 3.2Billion for the year ended March 2018.
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