Once upon a time, it was the predator, not the prey.
In India’s first wave of airline deregulation in the early 1990s, Jet Airways was a promising upstart, bringing world-class levels of service to a market long cursed with the legendary shortcomings of Air India. By the mid-2000s, Jet was standing tall, emerging as the victor in a takeover battle for rival Air Sahara. It began the current decade with solid profits, earning an 8% operating margin in 2010. Two years later, its closest rival—Kingfisher Airlines—collapsed in a cloud of debt and gross mismanagement, having infamously ordered every product in the Airbus catalog: A320s, A330s, A340s, A350s, and yes, even A380s.
But ultimately, Jet would meet the same fate, preyed upon by a younger generation of rivals, led by the low-cost carrier IndiGo and the premium-oriented Vistara, backed by the financial might of Singapore Airlines. Already by 2011, with fuel prices spiking and the Indian rupee depreciating, Jet stumbled to an operating loss of nearly $200m. Faced with financial ruin, it found a savior in Etihad, which in 2013 purchased a 24% stake in Jet, while also buying its London Heathrow slots and a majority stake in its loyalty plan.
That bought Jet some time. But it also compromised its ability to develop its international route network, by then responsible for more than half of Jet’s total revenues. It was the international realm where Jet had the most potential, still dominated as it was by the bloated Air India. In exchange for Etihad’s money, however, Jet was forced to funnel much of its intercontinental customers through Abu Dhabi, at the expense of its own hubs in Mumbai and Delhi—India’s largest airline was now essentially a feeder operation for an airline offshore. Partnering with Etihad also precluded it from joining a global alliance or partnering closely with airlines in key markets like Europe or North America. Its intercontinental network would remain greatly underdeveloped, ending 2018 with service just to London, Manchester, Amsterdam, Paris, and Toronto—New York JFK and Newark flights via Brussels were ended years earlier, as were flights to San Francisco, Milan, and Shanghai.
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