Over the last six decades, the airline's ticket sales costs have risen by 84%, while the mean air price per person has fallen by 17%." Talkative as ever, his behavior showed no sign of distress in the carrier he started a quarter cent ago. In the corporate declarations, its president Goyal was credited with words of the highest trust.
He also pointed out on another occasion that an invest in the troubled domestic Air India company, which may face several thousand crimes, is not remote from the airline's radars. Just under a fourth later came last week's news coverage - India's second largest air company by weight had just enough money to last another 60s.
Jet's Goyal and executive team, led by Vinay Dube, Chief Executive Officer, pleaded with their drivers, engineering staff and technical staff to make wage reductions of up to 25% if they wanted their employers to outlast them. The 60-day period has disputed that Jet is drawing public interest to the back winds of the global air transport sector, which are affecting the viability of the third biggest air transport sector in the globe. Jet is currently in a difficult period with increasing oil price, falling rupia, aggravated by the imbalance between high oil price and low fares," an air carrier spokesman said.
"Within the framework of the company's turn-around plans, several steps are being taken and continued to optimize costs and increase sales. Certainly, a 97% drop in net income for IndiGo from InterGlobe Aviation, the country's biggest carrier, has upset everyone. However, even then, Jet's financial data suggests that only 5 years after the sale of 24% of the business to Abu Dhabi-based Etihad Airways, it is near.
Fifty crores, the level at which it was in 2013-14, and less than a fortyth of its nearest competitor IndiGo at the end of fiscal year 18. Net indebtedness at March 31 was Rs 8,150 crisis, 23% less than in half a century, but still significant and more than three times IndiGo.
Macroeconomic pressure combined with the inherited liabilities - fleet, servicing, distributions and wages - seems to have put the carrier in a flawless state. Airlines are valued to vent 5 crore-10 crime per day alone in running cost. "We have a concrete turn-around schedule on the base of which talks are being held with financial institutions etc. and therefore no spectacular conclusion needs to be drawn," says the above -mentioned spokesman.
"The jet with the most net loss in the aerospace sector would make it even more challenging to fund," says Mahantesh Sabarad, SBI CAP Securities VP. Since some of the airline's other investment has dropped, it is not willing to spend more money burning to refuel jet. Goyal, perhaps one of the best global aerospace networks, is continuing to recruit new business partners, among them trading partners Delta Air Lines.
While meticulously running his business in a small format, he refuses to let go of old procedures and old human beings and is often at odds with his own leadership. As the spokesman disputes, "All decision-making is taken by the relevant body, be it the Board of Administration or its committees". Jet's own senior managers acknowledge that a turn-around is not simple.
"Airlines must spend capital to modernize their aircraft and infrastructures and make the business more flexible. In order to take over the business entirely, professionals need a mandate," says a leading jet manager. If Goyal has no cards up its sleeves and forges a new strategy for a much -needed capital injection, the carrier can leave the airport outright.
"Cut deadwood," says Shukor Yusof, founding partner of the Malays aerospace consulting firm Endau Analytics, as a core Jet approach to reviewing the company's overall strategy and costscape. "Actually, it hasn't really developed as an air carrier, is risk-averse, has no new idea or innovations... essentially a 70s dress of airlines in the year 2000", jokes a top manager of a competing air carrier, and calls Jet "a somewhat service-oriented variant of Air India".
In fairness, Jet has been able to narrow its belts by increasing capacity utilization since fiscal year 15 in comparison to many domestic competitors, but its high costs have always been a failure for viability. Present non-fuel costs per available passenger kilometer are 25-50% higher than those of competitors and wage expenditure has risen 53% over the last five years, surpassing airplane leasing as the second largest expenditure after gas.
These included the local airports manager Valerian Lobo and Rakesh Chawla, who left the jet hierarchy; Colin Neubronner, who served as Colin's general manager for distribution and communications, and the Singapore office general manager; John Victor, responsible for Colombo; four technical division executive officers; and several airports manager.
A number more are asked to leave, but Jet still retains a top-class organization and the industry's best purser for top manager. There have still got 25 VPs, Seniors VPs and executive VPs who get an annual salary that start at 2hrs crore, says one of the executives quoted above even after the overall severity of the older channel that has been cut in half in the last two years.
In his declaration, Dube also emphasized the "fleet simplification" as one of the most important measures to reduce expenses. However, the carrier has so far taken only modest steps to rectify the high level of service charges. The Jet has 4 aircraft type and 14 subtypes in its 120 aircraft portfolio, one of the most complicated structures in the area due to its large scale.
Most of its wide-body aircraft are more than 10 years old and older than those of Air India. Jet's service charges in three years (he has not previously declared this as a seperate expense item) have increased by 22% to 2,538 crore whereas he has only added 4 aircraft during this three years.
Some of its jets - a 13.52-hour day mean on the Boeing 737's, one of the world's highest utilisation rates for this jet in the world - are sweaty, but the carrier does not take advantage of others - it deployed two of its eight wide-body Airbus A330s on home flights and flies for 4.
Several of Jet's naval arrangements make it even more so. As an example, the carrier has a three-class 346-seat aircraft on its large-volume Boeing 777-300ERs flying long distance flights. In the same aircraft, Air France uses a 381 -seat aircraft whereas the KLM uses 408 -seat aircraft, which generates higher sales.
There are also two years of outstanding contracts to rent the ATR turboprop aircraft to another carrier. As Jet intends to extend the range of the A330, it has revised its maintenance agreement for the Boeing 737s, which would mean savings of up to $100 million (Rs 680 crore) in total cost per year, says an industry leader.
Most of the cost saving would come from the new Boeing 737 Max aircraft, of which it has ordered 225 and will receive 12 by the end of March. One manager says that since last year she has reduced about 10% of Gulf production capacities, a loss-making industry due to lower levels of market activity and intense competitive pressure.
In the last six years, the airline's ticket sales costs have risen by 84% to 2,538 USR. Twenty-three crore, while the mean fares per person fell by 17%. Paying 100 million dollars (680 rupees) as a fee for the use of a worldwide sales system, a computer-based networking that allows transaction between tour operators and airlines, it is expected to reach 140 million dollars this year.
"SETH has no idea of advanced revenues managment. You think that the only thing that counts is the in-flight service," says the competing carrier manager cited above. Dube's first day at the airlines was last Friday. Dube, former Delta Air Lines Asia Pacific Seniors VP, is praised as one of Jet's best Chief Executives.
Many went off suddenly, quoting "personal reasons," which resulted in fierce rumors of disagreement with Goyal or failure to adjust to his challenging ways. One example is Goyal's deep but eventful ties with Nikos Kardassis, the airline's first Chief Executive Officer in 1993, who, together with Goyal and his former colleague Saroj Datta, is said to have created the airline's first draft.
In 2013 he went back, allegedly because of disagreements with Goyal over the latter's choice to divest his interest in Etihad. At the beginning of the year Goyal turned again to his old boyfriend and returned him to an advising function. Sometimes Goyal is supposed to be a stone wall, the concrete proposals of his managers. As an example, he has been blocking a proposed introduction of a buy-meals-on-board scheme for all home destinations for more than a year, as this would weaken his airline's prime brand-name.
Goyal, a champion in alliance-building, is now, according to experts, making tireless strides to extend the scope of Jet's trade relations with Delta to include strategy. Both Goyal and Jet's senior executives have consistently refused to sell their shares. "Jet's reorganisation effort has not yet turned the corner...Delays in recapitalisation are at the heart of Jet's ongoing challenge, and further delay will raise the company's exposure to criticism, especially in the face of continued loss in fiscal year 19," said Kapil Kaul, CEO South Asia at CAPA-Centre for Aviation, Sydney-based advisor.
So far Goyal has been a viable survival, but Jet as a full-service carrier needs a major overhaul.