Jet Airways Case Study: Reasons for Shutdown & Possible Revival

Lakshya Singh Lakshya Singh
Sep 14, 2021 12 min read
Jet Airways Case Study: Reasons for Shutdown & Possible Revival

The Jet Airways case study is now so popular that it is mentioned in almost every Business School's curriculum due to the airline's unimaginable debacle. Founder Naresh Goyal is being investigated by the Enforcement Directorate (ED) and a large number of ex-employees still remain jobless after the airline shut down its operations in April 2019. As per April 2020 reports, around 4000 employees are still on the rolls of Jet Airways, and these employees are facing tough times in the absence of any regular source of income.

Jet Airways' shutdown is often considered as one of the biggest organizational failures to have occurred in India. A lesson for many, this post covers the journey of Jet Airways and digs deep into the reasons for its failure.

After its collapse, Jet Airways declared bankruptcy and on 17 April 2019, it decided to shut down operations temporarily. Some of its assets have gone to other airlines while a few aircraft remain parked till the bankruptcy proceedings are completed.

Is there a possibility that Jet Airways will restart operations soon? Will Jet Airways' dwindling fortunes be revived? Let's get started!

Latest News About Jet Airways
Indian Aviation Industry
Jet Airways History
Similar Cases In Aviation Industry
The Common Link In All Of These Cases
Reasons Behind Jet Airways Bankruptcy
Buying Proposals
The Possible Revival Of Jet Airways In 2021

Latest News About Jet Airways

September 13, 2021 - Jet Airways' shares surged by 5%. The defunct airline company is likely to resume its domestic flights after March 2022.

February 2021 - Jet Airways is looking to start operations with 25 new aircrafts in the first phase and the base will be in Delhi-NCR. (Source: businessworld)

December 2020 - As per the official statement released by Jet Airways, if everything goes as per the resolution plan and the consortium receives the NCLT and Regulatory approvals, then Jet Airways will start its operations by summer of 2021.

October 18, 2020 - The lenders of Jet Airways approved the resolution plan submitted by UK-based Kalrock Capital and UAE-based entrepreneur Murari Lal Jalan to revive and operate the airline.

May 25, 2019 - The government temporarily reallocated Jet’s slots to keep a check on reducing capacity in the sector due to a significant drop in the carrier’s flights. (Source: Livemint)

According to some sources, IndiGo and SpiceJet have been allocated 130 slots each, Vistara 110, GoAir 52, Air Asia 42, and Air India 24 slots at Indian airports from Jet’s quota. (Source: Livemint)

Jet Airways founder Naresh Goyal and his wife Anita were stopped from leaving India by immigration authorities at Mumbai airport. They were offloaded from a Dubai-bound Emirates flight, which was called back after it had reached the taxiway at Mumbai airport. (Source: InShorts)

Jet Airways shut down its operations temporarily on 17 April 2019. The last flight was from Amritsar to Mumbai. The shutting down of the company affected 20,000 employees and more than 60,000 people indirectly. The company is reportedly in a debt of a billion dollars. NAG (National Aviator’s Guild) appealed to the PMO (Prime Minister’s office) and then-Civil Aviation Minister Suresh Prabhu to help the company and its employees.

Jet Airways Case Study
Jet Airways Employees Pleading with the Government to Save the Company

The government on the other hand reportedly asked the banks to save the company without pushing it to bankruptcy. With unemployment being a major electoral issue for the government, an addition of 20000 to the list of jobless Indians will only give more substance to the opposition. The Government is therefore pulling out all the stops to prevent Jet Airway's insolvency.

Jet Airways Case Study - Jet Airways Employees Lit Candles
Jet Airways Employees Lit Candles, Pleaded the Govt. to Save the Company and Their Jobs 

Consequences have been of such an unprecedented level that an employee of Jet Airways committed suicide in Mumbai. Shailesh Singh was a cancer patient and was on a break from his job of a senior technician in Jet Airways. He jumped from his building due to depression on 27 April 2019.

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Indian Aviation Industry

- Jet Airways Case Study - Jet Airways' Planes
Jet Airways' Planes

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The United States, on the other hand, has 7,309 commercial aircraft for a population of 328 million. To add to the aviation industry's woes, the majority of Indian airports are not up to the mark in terms of infrastructure. For instance, most of the airports in India have only a single operational runway, whereas countries like the US have no less than 5 runways.

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Jet Airways History

Jet Airways Case Study - History Of Jet Airways
History Of Jet Airways

Naresh Goyal started Jet Airways with 4 leased Boeing 737 aircraft in 1993. The airline was the paragon of success for domestic carriers in India. There were rumblings of trouble brewing within Jet Airways in August of 2018 when the company deferred the second quarter results of that year.

The government watchdogs got a sniff of discrepancies in the airline's financials. In the same month, the DJCA (Directorate General of Civil Aviation) conducted a financial audit of Jet Airways. It was based on the reasoning that the deferment of employees’ salaries ought to affect their morale and attitude.

The same month, Jet Airways posted a loss of INR 1323 crores.

In September of 2018, the Income Tax department surveyed the Delhi and Mumbai offices of Jet Airways. The company was then alleged for financial misappropriation.

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Similar Cases

It is not the first time that an airline company has fallen from grace. Many companies before Jet Airways have seen similar fate. Some of them are:

  • Kingfisher Airlines
  • Air Deccan    
  • Air India Cargo
  • Indian Airlines
  • Sahara Airlines

The Common Link In All Of These Cases

The common link in all of the above examples is that they all were, at some point, involved in a merger.

Jet Airways Case Study - Deccan Airlines Plane
Deccan Airlines Plane

Kingfisher Airlines bought Air Deccan. Kingfisher was a full-service airline, whereas Air Deccan was a low-cost airline. When Kingfisher bought Air Deccan, it incorporated some changes in Air Deccan’s fleet and we all know what happened after that. Both the companies faced a downfall.

Before Air India and Indian Airlines merged, both of them were doing reasonably good. After coming together, the crown jewels of Indian airspace remain in the red. Air India has a debt north of INR 50,000 crores and nothing positive has come out of the government's efforts to revive the national carrier.

Jet Airways merged with Sahara Airlines and Jet rebranded Sahara as “Jet Lite”. Sahara Airlines is now lost in oblivion and Jet Airways is heading on the same path.

Therefore, it won't be wrong to say that mergers and acquisitions in case of airlines are a risky bet. A successful airline establishes a unique identity of its own, and meddling with its brand and presence usually ends on a negative note.

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Reasons Behind Jet Airways Bankruptcy

There are many reasons behind the failure of Jet Airways:


The merger between Sahara Airlines and Jet Airways was a mistake on Jet Airways' part. Sahara was acquired by Jet Airways for $500 million which was way above what the airline was actually worth.

Jet Airways Case Study - JetLite Plane
JetLite Plane

Rebranding Sahara Airlines

Jet Airways renamed Sahara Airways as JetLite. Sahara at the time was a powerhouse with its name on every Indian's tongue. The rebranding cost Jet Airways a major chunk of its customers; flyers who were attracted towards the Sahara brand image couldn't resonate with JetLite.


Every company and organization rests on the abilities of its management board; there are no second opinions to this school of thought. Naresh Goyal, the founder of Jet Airways, decided to become a one-man army for Jet Airways and did not hire a sound management committee to assist him in running the airline. Insiders often talk about his poor financial acumen. He relied on a single management team for handling all the operations related to Jet. Understanding that specialized teams are needed to run different departments is no rocket science. And when you acquire one more airline, you can't rely on your existing management board that's already burdened to take up additional responsibilities!

Jet Airways' Founder Naresh Goyal
Jet Airways' Founder Naresh Goyal

Full-Service Airline

Full-service airlines offer passengers the choices of economy, business class, premium economy, and first class on their flights. The company was operating as a full-service airline. Operating as a full-service airline in India is not an easy task. One needs formidable financial support and customer relationships. Catering to the wealthy, the middle class, and the lower sections of the Indian society requires strategy and operational excellence beyond imagination. That is why most of the companies focus on the middle-class segment and keep the prices as low as possible. Jet Airways was biting off more than it could chew.

Drowning in Debt

Jet Airways was never good with money. It kept on incurring debt and spending more than its revenue. The employees were paid lavishly when compared to the industry standards. For the sake of providing comfort and luxury, the Naresh Goyal-backed airline compromised with finances.

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Buying Proposals

Jason Unsworth, a British Entrepreneur and CEO of Atmosphere Intercontinental Airline, expressed his interest in buying a controlling stake in Jet Airways.

However, Jason was told by Jet Airways to sit down with SBI Caps Limited, which was leading the resolution plan for the carrier.

Jason claims to have written to Jet Airways’ lenders but never receiving any reply in return. He later wrote to Jet Airways’ CEO, Vinay Dube, about the proposal to purchase a stake in the airline. Jason said he was provided with contacts of SBI to get in touch with. He is also in talks with other Indian entrepreneurs and investors for financing his bid for a controlling stake in Jet Airways.

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The Possible Revival Of Jet Airways In 2021

As per the official statement released by Jet Airways, if everything goes as per the resolution plan and the consortium receives the NCLT and Regulatory approvals, then Jet Airways will start its operations by the summer of 2021.

The new promoters of Jet Airways (Murari Lal Jalan and Kalrock Capital) considered starting a new airline but ultimately decided to go with the Jet brand; mainly because of its brand value and customer connects. As per the resolution plan, Jet Airways intends to operate all of its historic domestic slots in India and restart international operations.

On 18 October 2020, the lenders of Jet Airways approved the resolution plan submitted by UK-based Kalrock Capital and UAE-based entrepreneur Murari Lal Jalan to revive and operate Jet Airways.

The new management of the grounded airline has reached out to top executives in the aviation sector to run daily operations. Apart from passenger operations, the new management will focus on the cargo operations to improve the airline.

“The Consortium's vision is to regain lost ground, set new benchmarks for the airline industry with the tag of being the best corporate full-service airline operating on domestic and international routes. The Jet 2.0 hubs will remain Delhi, Mumbai, and Bengaluru like before. The revival plan proposes to support Tier 2 and Tier 3 cities by creating sub-hubs in such cities," the official statement noted.

The new management’s vision for Jet 2.0 is inclined towards increasing the cargo services to include dedicated freighter service (An undeserved market Indian carrier). "Given, India’s position as a leading center for global vaccine manufacture, cargo services have never been more required," the statement added.

“Jet Airways has been a brand with a glorious history of over 25 years, and it is the vision of the consortium to put Jet Airways back in the skies at the earliest opportunity. We aim to re-energize the brand by infusing energy, warmth, and vibrancy into it while making it bigger and better," said Manoj Narender Madnani, board member of the Jalan Kalrock consortium.

Jet Airways is looking to resume its domestic flights in the first quarter of the next year, after March 2022 in the light of new promoters for the defunct airline. The shares of the airline surged by 5% on September 13, 2021, bringing in a fresh wave of hope for the airline. Jet Airways is currently headed by Murari Lal Jalan, a businessman based in the United Arab Emirates, and the London-based Kalrock Capital, the new owners of the airline company.

Jet Airways has been grounded since April 2019 and is now looking for a resolution to its bankruptcy. Boeing B777-300(ER), one of Jet Airways' airplanes that was seized in the Netherlands due to unpaid dues has not been sold off. Punjab National Bank, one of the lenders of Jet Airways that had approved of the resolution plan earlier has now appealed against the same for which it has approached the National Company Law Appellate Tribunal (NCLAT).


As reported in March of 2020, the bidders who issued Express of Interest (EoI) to buy Jet Airways did not submit any resolution plan adhering to the requirements. As confirmed, the grounded airline did not find any buyer till 9 March 2020.

By March 2020, around 20,000 claims were made on Jet Airways which amounted to around INR 37,000 crores. Of this, while workmen and employees have claimed over INR 14000 crores, creditors are claiming over INR 11,000 crores from Jet Airways.

Looking at the current scenario, it does not seem like the Jet Airways saga has come to an end. The Indian Government's role is pivotal in deciding the course this crisis ultimately takes.

Jet Airways was on the verge of bankruptcy. Many entrepreneurs have come forward to employ people who lost their jobs due to the Jet Airways crisis. Many have been absorbed by competitors such as SpiceJet. If someone ultimately buys Jet Airways, there's hope for the ex-employees of the bankrupt airline to get their dues. And it appears that the revival of Jet Airways is possible with the emergence of new promoters and a renewed management committee.

Stay tuned for more updates on the Case Study of Jet Airways!

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