Washington, DC/Brussels/New Delhi – Jet Airways nosedived this week – jeopardizing more than 20,000 jobs in India – gatecrashing into the media headlines, as world’s largest democracy is holding its general elections. Prime Minister Narendra Modi, who is seeking re-election amid concerns on rising unemployment, is silent on the situation but is definitely worried.
“Late last night we were informed by SBI, on behalf of the consortium of Indian lenders, that they are unable to consider our request for interim funding. Since no emergency funding from the lenders or any other source of funding was forthcoming, it would therefore not have been possible for us to pay for fuel or other critical services to keep the operations going,” the carrier said in an April 17 statement, adding, “With immediate effect, Jet Airways is compelled to cancel all its international and domestic flights.”
Jet Airways employees are continuously staging protests in New Delhi and Mumbai, imploring the Prime Minister Modi to save their company while they accuse Jet Airways management of leaving them in the dark about the airline’s crisis.
With Jet Airways temporarily suspending all flight operations as the banks refused interim funding for maintaining even bare minimum operations, there is also $1.2 billion debt to take care of. Adding to its woes, most airport slots have been reallocated, and airplanes have been repossessed by the leasing agencies for nonpayment of dues.
As Jet Airways gets grounded within a decade of operations, it reminds of a similar cash crunch that had pushed Vijay Mallya’s indebted Kingfisher Airlines to go belly-up in 2012. It never flew again, and Mallya, in London, is fighting his extradition to India from the United Kingdom.
With Indian general elections going on in successive stages past mid May – and the results scheduled for May 23 – the incumbent Prime Minister faces a strong negative impact on his party’s prospects as he already faces allegations of failure to deliver on promises about jobs.
As a result of Jet Airways suspending flights, airfares have skyrocketed in the Indian aviation skies which will definitely affect voting patterns.
There is no direct word from the Prime Minister, nor from his top political lieutenants, and whether the slew of last minute interventions will help Modi in the elections remains to be seen.