The Taste With Vir: Jet Airways and its sudden decline
In this week’s column, Vir Sanghvi throws light on the sudden crisis at Jet Airways, the plight of its employees and what lies in store for them in the near future.Updated: Apr 16, 2019 18:29 IST
It saddens me that so many of us look at the current mess in Jet Airways with such indifference. When we do talk about it, our concerns are nearly always selfish. Isn’t it a nuisance, we say, that they have cancelled so many flights? When will they get their act together? And so on.
Few of us bother to think about the employees of Jet Airways. Often, when companies fail, the employees have already seen the writing on the wall and have adopted a couldn’t-care-less attitude.
The opposite is true of Jet Airways. For a start, the collapse was so sudden and so unexpected that the employees had no time to adjust to the idea that they may soon be salary-less. For another, even when they knew that the airline was in desperate straits and only a few loyalists like me kept flying Jet Airways, the staff acted as though nothing was the matter.
They were as hardworking, as dedicated and as devoted to their customers as they had always been. It can’t be easy for ground staff to check someone in with a cheery hello or for a cabin attendant to try and persuade a passenger to have a cup of coffee after the meal when they don’t know where their next salary is coming from. But the Jet Airways employees did it. Not once did I feel that the service had slackened or that the employees were putting their own concerns ahead of those of the passengers.
The fact that so many of them are now struggling to pay school fees for their children or keep up with the EMIs on their homes should serve as a reminder of the way things work in today’s India. It doesn’t matter how sincerely and hard you work. It doesn’t matter that you are part of one of the world’s great airlines. The dedication and quality that you have brought to your work are irrelevant.
When a crash comes, it is brutal, sudden, inexplicable and nearly always unfair.
One reason why people seem so unsympathetic to the plight of Jet Airways and its employees may be because a new generation is too young to remember what life was like till the mid-1990s when private airlines were not allowed to challenge the monopoly of Indian Airlines.
Till that point, air travel in India was a privilege, not just a means of transport. Indian Airlines was not a bad airline (it had many strengths that often went unnoticed while everyone commented on its flaws) but it was ---- at the end of the day --- a public sector monopoly. This meant that there was political interference, that many employees took it easy knowing that their unions would protect them and that chief executives were often appointed on the basis of patronage rather than competence.
By the early 1990s, just before the private airlines came along, the employees had got so cocky that the pilots – the highest paid public sector employees in India --- routinely misbehaved and/or went on strike. For me, the last straw came in the chaotic days following the demolition of the Babri Masjid when riots broke out all over India. It was at this time that Indian Airlines pilots announced that they would go on strike. After that, I lost any respect I may once have had for them.
Because Indian Airlines was the only domestic airline, seats were hard to come by. Today, if you live in Delhi and want to take a flight to Mumbai, you check online for a fare and timing that suit you and make your booking. But, in that era, because there were so few flights, you had to book days in advance to be guaranteed a seat.
Many government agencies had quotas on flights. So seats were traded from these quotas for the powerful and the influential. Sometimes, corruption flourished at airports. I saw people slipping a few hundred rupees notes into the palms of check-in staff at Goa airport to get on to Mumbai flights during the New Year season.
The private airlines put an end to all that and the competition worked to the benefit of Indian Airlines which suddenly became more efficient. (It was later merged with Air India which led to a new set of problems).
I have lost count of the number of private airlines that came and went. (Does anyone remember East West or Damania?) But two airlines seemed to me to have staying power. The first was Indigo which has always been superbly managed (despite the recent incidents where its staff assaulted a passenger etc.) and the second was Jet.
I was an admirer of Kingfisher but even as it flew the skies, one had the nagging feeling that the economic model was too lavish to last. I am not sure why Kingfisher failed (Vijay Mallya has one version; the government has another) but its demise was a loss to Indian aviation.
Jet, on the other hand, always seemed to be more soundly managed. I knew Naresh Goyal in Mumbai when he was the king of the travel trade (he was General Sales Agent for several top airlines) and as much as I admired his vision of a world class airline, I never thought he could pull it off. In fact, he surprised all of us by creating an airline that was easily on par with any American or European carrier.
I knew he had achieved something that I thought was impossible when all the movie stars and millionaires I knew who made fun of me for travelling Air-India and sang the praises of British Airways, shifted loyalties and began travelling Jet. That is a whiny, difficult constituency to please but Naresh won their loyalty.
For frequent travellers, the aircraft part of the journey is often the least important component of the experience. Most airlines fly the same aircraft, get their food from the same flight kitchens and offer similar levels of premium service. (The exception is Vistara where the Business Class experience on board the aircraft is better than Jet or Air-India).
What really matters is the ground handling: ease of check-in, personal recognition, how long the luggage takes to arrive, being kept informed of delays etc. And this is where Jet scored (even over Vistara, though these days Air-India has also got significantly better) to the extent that nearly anybody who was anybody in India travelled Jet.
So how did it go so wrong? As best as I can tell, costs are too high in India (jet fuel, landing charges etc) for airlines to offer the low economy fares that they have to sell in order to compete in the market place.
But why Jet got it so wrong and why the collapse was so sudden is still a mystery to me. A year ago, there was talk of Jet bidding for Air India; now Jet itself struggles to survive.
You could argue --- as some people have --- that the market has a self-correcting mechanism. It will drive out bad products so let’s not shed any tears over Jet, they say. I am not sure that makes much sense. I can understand why people stopped watching Doordarshan once the private channels arrived, why the mobile operators provided a better service than the old telephone department or why the Ambassador faded in to oblivion once better cars came along.
But I am wary of using market-jargon in a sector like aviation where so much of the environment (fuel costs are the most obvious example) is still controlled by the government and not the market. And I also believe that Jet’s problems were not structural in nature. It was not an airline that was behind its time —like, say, the Ambassador car — or one that functioned badly. Yes, there was a mismatch over the last year between costs and revenues. And yes, I can understand why creditors might want to take control of the management themselves.
But nothing explains the current situation where the airline is being ground into the dust, its value eroding each day only because of a lack of working capital. It would not cost the banks a lot to keep Jet flying till a buyer is found.
All that their refusal to provide any money ensures is that when Jet is eventually sold, it will be worth much less. I hope that is not part of some greater master plan.
Either way, there is much to be sad about. One of the few Indian brands that provided world class service has collapsed. And the men and women who worked hard to make it great now stare at a sad and uncertain future.
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