Jet Airways Case Study: Reasons for Shutdown & its Upcoming Revival

Jet Airways Case Study: Reasons for Shutdown & its Upcoming 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 has been investigated by the Enforcement Directorate (ED) and a large number of ex-employees have remained jobless after the airline shut down its operations in April 2019. April 2020 reports revealed that around 4000 employees were still on the rolls of Jet Airways, and these employees were facing tough times in the absence of any regular source of income.

Jet Airways' shutdown is often considered 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. However, if you are wondering "is Jet Airways coming back?" then you would be glad to know that it is indeed, as far as the recent May 2022 reports reveal.

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. However, with the recent advancements that proved positive for the airline company, the popular airline service provider may see a revival in 2022 itself.

In this Jet Airways case study, we will delve into the Jet Airways insolvency case, which will cover the Jet Airways introduction, its history of Jet Airways, its downfall of Jet Airways, and the resuming of its operations that is due. So, let's get started!

Indian Aviation Industry
Jet Airways History
The Consequences of the Downfall of Jet Airways
Similar Cases In Aviation Industry
The Common Link In All Of These Cases
Reasons Behind Jet Airways Bankruptcy
Buying Proposals
Jet Airways, All Set for the Revival In 2022
The Future Plans of Jet Airways

Indian Aviation Industry

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

Aviation is an under-saturated sector in India. As more and more Indians choose flight as the best means of travel, the availability of aircraft is yet to catch up with this growing trend. For the numbers, India has 565 commercial aircraft for a population of 1.3 billion.

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

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 DGCA (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 of financial misappropriation. Naresh Goyal, who was then the Founder-Chairman of Jet Airways, also came under the radar of the government and its law enforcement agencies. He and his wife, Anita Goyal stepped down from the Jet Airways' operations on March 25th, 2019, after the financial crisis that the airline company was in, came in front of everyone.

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 on May 25, 2019, since then, he was stopped from flying out of India.

There were charges of money laundering and foreign exchange violation against Naresh, and this led the Enforcement Directorate to question him in September 2019. He was detained and questioned again by the ED in 2020. As far as the recent reports dated April 22, 2022 go, the Central Bureau of Investigation (CBI) would likely file a First Information Report (FIR) against Naresh Goyal for defrauding banks and misappropriating the bank-sanctioned loans. The banks and their officials who granted him the loan, also came under the scanner this way.

The Consequences of the Downfall of Jet Airways

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 as a senior technician at Jet Airways. He jumped from his building due to depression on 27 April 2019.

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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 a 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 well. 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 the 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 and Former Chairman, 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.

The winner of the Jet Airways bid was the Kalrock and Jalan consortium, which has proposed a total cash infusion of INR 1375 crore, which includes INR 475 crore that will go to meet the stakeholders' payments and of the other financial creditors.

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Jet Airways, All Set for the Revival In 2022

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, mentioned an official statement released by Jet Airways. Though 2021 wasn't the year that we saw the Jet Airways flight take off again, 2022 will not disappoint all those who were awaiting a Jet Airways comeback. The Union Home Ministry has already granted security clearance to Jet Airways, as per the news dated May 8, 2022, and the Delhi-based Indian Internation airline operator would be relaunching its commercial flight operations in the next few months. Jet Airways is now promoted by the Jalan-Kalrock consortium, which was earlier operated by Naresh Goyal, under whom it operated its last flight on April 17, 2019.

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 connections. As per the insolvency 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 underserved 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.

The Civil Aviation Ministry sent a letter to the airlines on 6th May 2022, which informed Jet Airways about the grant of security clearance by the Union Home Ministry. Jet Airways operated with a test flight on May 5, 2022, to prove to the aviation regulator DGCA that the aircraft and its components are up and running. Jet Airways, now, is pending to prove the Directorate General of Civil Aviation (DGCA) with other proving flights, before it gets the air operator certificate. These proving flights will have the DGCA officials and airline officials as passengers and cabin crew members on board and will be the same as commercial flights.

Jet Airways has been grounded since April 2019, after two decades of flying successfully because it failed to gather funds enough for running its operations. This left around 20,000 people jobless. The flight operator had a partnership with Etihad Airways. Due to the lack of operating cash, the airline company initially started cancelling flights, cutting routes, grounding planes, and handing pink slips to employees. The insolvency proceedings for Jet Airways were then initiated in June 2019.

It was in 2020 that UK’s Kalrock Capital and the UAE-based entrepreneur Murari Lal Jalan came up with their plans. The Committee of Creditors of Jet Airways approved the resolution plan of the consortium in October 2020, of Kalrock and Jalan. The National Company Law Tribunal also approved the resolution plan in June 2021.

Boeing B777-300(ER), one of Jet Airways' airplanes that were 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 the resolution plan earlier has eventually appealed against the same for which it has approached the National Company Law Appellate Tribunal (NCLAT), citing irregularities. However, this couldn't hold back Jet Airways, it seems.

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The Future Plans of Jet Airways

Jet Airways appointed Sanjiv Kapoor as its new CEO on March 4th, 2022, which certainly means that the popular airline company that went defunct in 2019, would again be resuming its operations under the ownership of the Kalrock-Jalan consortium. It is currently going through a court-monitored restructuring and plans to return with a hybrid of premium and no-frills services. The flights of the revived Jet Airways, which will be helmed by Kalrock and Jalan, would have a two-class configuration where the business class passengers would be offered premium services including free meals, whereas the economy class of Jet Airways would be operating similar to the low-cost carriers, where the passengers would pay for their own meals.      


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.

While looking at this scenario, it did not seem like the Jet Airways saga will come to an end anytime soon. The Indian Government's role was pivotal in deciding the course this crisis ultimately takes. However, with the recent advancement, powered by the Kalrock-Jalan consortium, things seem to be looking up at last for Jet Airways.  

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, and many have been absorbed by competitors too, like SpiceJet. Now, with the Jet Airways' revival at nigh, there's hope for a whole lot of employees. Besides, the ex-employees of the bankrupt airline might also find some solace just by seeing the airline company raise its head up again, if not join the airline once again. Nevertheless, the successful revival of Jet Airways would certainly be no less than a historic event not only in the history of the airline industry but among the Indian companies that survived the worst of fates.

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


What is Jet Airways?

Jet Airways is an Indian International airline service provider that was founded on April 1, 1992, and headquartered in Delhi NCR. It commenced its operations on May 5, 1993.

Who founded Jet Airways?

The NRI Indian businessman, Naresh Goyal founded Jet Airways, who was also the Chairman of the airline company.

Why did Jet Airways shut down?

There are numerous reasons that propelled the downfall of Jet Airways but the most prominent reason for the Jet Airways shut down is the lack of funds, and mounting debt.  

What is the Jet Airways insolvency case?

Jet Airways, which started off as an air taxi operator in 1993, was under insolvency for nearly 2 years after which it ceased its operations in April 2019, when it revealed the huge debt that it was in. The insolvency resolution plan was eventually brought up by UK-based Kalrock Capital and the UAE-based entrepreneur Murari Lal Jalan, which looked promising enough, and it is the same consortium that is finally proving promising enough for Jet Airways today.  

Is Jet Airways coming back?

Yes, the news is true, for Jet Airways is coming back indeed for operations. Jet Airways has already got the security clearance from the Union Home Ministry on May 6, 2022, after it successfully operated a test flight on 5th May, which has proven that the aircraft and all of its components are in good condition and working well to convince the aviation regulator DGCA.

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