JetAirways deep discount sale to rise working capital

Jet Airways seem to be on a desperate attempt to raise some cash. My facebook friends- Raghv Tripathi and Acharya Deepak recently reported multiple super cheap fares on JetAirways- such as Delhi-Singapore for 5k oneway and so on.
I was little busy to work out a blog post immediately, so this post is going live a day late, but it is still not too late. There’re multiple tempting deals on JetAirways. Below is a sample, do check more for origin and destination of your interest. Low fares are available for dozens of destinations.
Some of my friends have noted that the fares are cheaper on some external website like Kayak and Skyscanner and others than Jet Airways website. I believe Jet Airways has given some target to these sites and has promised incentives if they exceed the target. Because of this the travel websites are probably using the incentive money to discount the tickets a bit further. (Just my guess-not sure)

Jet Airways got into all the bad news recently with announcement that they don’t have cash beyond 2 months unless something drastic is done asap. Airline proposed cutting staff salaries, selling promotor’s equity and many other measures. The above deep discount sale is part of that exercise, to raise as much money as possible that can be used for immediate working capital needs. There’re many other ways being adopted too- Boeing is said to have returned 200 million dollars from the advance payment Jet had made for new 737 max aircrafts. There was another news in which Jet is planning to sell meals on board the flight (even Vistara tried similar with freedom fares). Hopefully all these measures would pay off and Jet Airways will continue to fly.

Will it be safe to book Jet Airways for immediate travel?
Yes. I don’t see any drastic steps like massive flight cancellations trickling in right away- if that were to be the case it will happen a several months later, if airline fails in every other attempt made to keep it as going concern.

Will it be safe to book jet airways ticket for say 2019?
I don’t have enough information to comment on this. It is not a good idea to guess that a big airline will go down- that would trigger panick and cause even more damage. At this moment I suggest we stay positive that airline will continue for near foreseeable feature.

If situation gets worse, may be they will cut some routes, cancel flights, sell some planes, give up their lucrative landing slots in premium airports and so on. So I am optimistic there will be some turn around soon.

How to detect if trouble at JetAirways is getting worse?
If Jet is not able to fund its daily operations, following signs will emerge. I hope there won't be such a situation
  1. Jet will start cancelling less important flights- domestic flights on less popular routes to save money
  2. Vendors will put on Cash & Carry mode, meaning Jet will have to pay in cash for fuel, food etc
  3. Refunds may take longer
  4. Employee salary payment gets delayed and may result in strikes or protests
What happens if Jet Airways stops flying?
Jet has about 20% market share so if they stop flying it will be a big void. Indigo, Spicejet, Air India and Air Vistara will be able to increase their prices- my guess is these airlines will buy available aircrafts from Jet and use it to expand their fleet and network faster. But this is far-fetched thinking. At this moment we should hope for the best, support Jet Airways by flying with them where possible and wish them luck in their turnaround plans.

Let me know what do you think about Jet Airways Crisis? Will they turn around quick enough?

1 comment:

  1. A well-researched article. Very informative. Thanks for sharing.


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