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Old 28th March 2019, 06:10   #31
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Default Re: How come the PSU banks are saving Jet Airways, but didn't do the same for Kingfisher?

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Originally Posted by hserus View Post
So in your opinion the government convinced PSU banks to bail Jet Airways out because it is financed by, according to Swamy's statements, Dawood Ibrahim and a prominent opposition politician?
There are no enemies in politics. The prominent politician in question was awarded Padma Vibhushan, India's second highest civilian award, by the same opposition.
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Old 28th March 2019, 07:21   #32
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Default Re: How come the PSU banks are saving Jet Airways, but didn't do the same for Kingfisher?

Loads of posts in this thread have been made by folks who have not studied what has happened with Jet. What banks have done is:

1) Taken a 51% stake in Jet for ₹ 1 - viz all their existing debt remains, but they also have 51% of the airline
2) Forced the Goyal family out, and taken the ability to sell the business to a bidder of their choosing
3) Provided ₹ 1500 cr of priority interim financing, which helps keep the airline operating for 2 months

What the banks have done here is gives Jet a chance to keep operating, while they look to conduct an orderly sale. In the worst case, where no bidders emerge, the odds are high that the few valuable assets that Jet has (its 12-15 owned planes, 49% stake in Jet Privilege etc) can be used to recover the interim financing. If a bidder can be found, the banks may recover not just the interim financing but all or part of their debt. Au contraire if they had done nothing, Jet would have been left with only its owned aircraft, would have lost all slots (which are allotted on a use it or lose it basis, and are not traceable assets), and would have shut down in a week or two cost loads of jobs and disruption.

This is a far superior method of dealing with the situation in Jet compared to the toolkit available to the banks when Kingfisher failed. In that case, banks lent money to Kingfisher against its much vaunted brand, and also converted their debt into equity at the 6 month average market price of the stock. And banks gave Kingfisher lots of financing in a much less transparent fashion (just as they did to all borrowers before the Bankruptcy Code and related RBI circulars), it finally went under when there was no other alternative (which can of course happen to Jet if no buyer emerges in the next two months).
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Old 28th March 2019, 08:21   #33
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Default Re: How come the PSU banks are saving Jet Airways, but didn't do the same for Kingfisher?

Mod Note: Keeping our rules in mind, please avoid any & all political posts. Thank you!
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Old 28th March 2019, 09:36   #34
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Default Re: How come the PSU banks are saving Jet Airways, but didn't do the same for Kingfisher?

^^^^
Thank you Hayek for the most sensible and informative post on this thread.

GTO, allow me to disagree with your view on ToI - it is the paragon of paid news as is its sister ET. So guess who is behind the article.

Both KF and Jet were / have been assisted by the Banks. VM chose to continue cheating the banks & his employees (by not depositing tax & PF deducted) even while he was being helped. Further the iron cast arrogance and contempt he displayed at creditor meetings was a sight to behold. NG is no saint but has been two ounces more transparent and has a big shareholder who also forces NG to stay somewhat straight .

The moot point is why are airlines shaky despite India being one of three fastest growing large markets? - our tax payers money is used by Air India to offer commercially unsustainable fares. So we bear the loss as tax payers and other airlines book losses as their competitors.

Last edited by GTO : 18th April 2019 at 11:36. Reason: Removing part on click bait please :)
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Old 29th March 2019, 00:00   #35
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Default Re: How come the PSU banks are saving Jet Airways, but didn't do the same for Kingfisher?

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Both KF and Jet were / have been assisted by the Banks. VM chose to continue cheating the banks & his employees (by not depositing tax & PF deducted) even while he was being helped
This is a very important point which some posters here missed while trying to portray Mallya as unfairly victimised.

In addition to Mallya's arrogance vs Goyal's relative mellowness (or whatsoever), let us not forget one important thing. Jet had a promoter who started from the grassroots in the travel industry. Same could not be said about Kingfisher. Anybody can offer world class products but if you turn a blind eye to costs, the end result will be predictable. Would you have paid three times Air Deccan fares to fly Kingfisher for their world class services at viable (for the high cost base) fares, especially if it was your own money? Of course NOT.

Kingfisher had incompetent management. The first generation of Jet Airways managers were all highly competent. Goyal hired the cream from Indian Airlines (IC) and Air India (AI) . And unlike what many people think, in the 1990s, AI and IC had some highly competent top and middle managers who went on to build the "World Class" Jet Airways of the 1990s and the first half of 2000. Yes it did help that it was a comfortable duopoly mostly on India's domestic routes with Jet and Indian Airlines (along with a much smaller Air Sahara).


I would put down the down turn of Jet (and the unsustainability of Kingfisher) mainly to two important factors.

1 The failure to adapt when LCCs starting with Air Deccan entered the scene in 2003. Average fares started dropping big time and little meaningful effort was made by both Jet and Kingfisher to reduce costs. But they were forced to drop fares. Passengers drooled....as they could enjoy world class service in Kingfisher and Jet Airways at "silly" fares but the balance sheets took a hit.

2 Ill advised poorly managed and integrated mergers . Jet with Sahara, Kingfisher with Deccan. The only happy partners in the deal were the investment bankers and the management consultants. At one point after the merger, Jet Airways scenario was a wonderful case study in Brand Confusion. At the same time they had three simultaneous product offerings - the main stream Jet Airways product in addition to Jet Konnect and Jet Lite. Product differentiation between the three was a mystery to most other than Jet Airways management.


Quote:
The moot point is why are airlines shaky despite India being one of three fastest growing large markets? - our tax payers money is used by Air India to offer commercially unsustainable fares. So we bear the loss as tax payers and other airlines book losses as their competitors
.

I do not fully agree with you on this, Sir. Atleast on domestic routes, Air India was not the one dumping fares. It was the Low Cost Carriers and competition including Air India and Jet Airways were forced to follow suit.

And in all fairness it is Air India who has made a real effort in reducing their cost structure to compete in the low margin high traffic India-Middle East routes. Air India Express to the best of my knowledge has a much lower cost base than Air India and it helps them stay competitive.

Last edited by navin : 23rd April 2019 at 15:39. Reason: typo
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Old 29th March 2019, 09:03   #36
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Default Re: How come the PSU banks are saving Jet Airways, but didn't do the same for Kingfisher?

I see these forlorn 7 aircraft (ATR 72/42-500s) every week when flying out of MAA. Apologies for the picture quality.{https://goo.gl/maps/BFYfMjJFLrS2}

From the Hindu article below, I understand that 3 were owned while 4 were leased. I assume they were heavily cannibalized for spares in the last operating periods, and are now destined for scrapping by AAI? Most have the propellers missing and one lacks the nose cone.

https://www.thehindu.com/news/cities...cle8549170.ece

Neither can I see any customary protection for the cockpits, engines, tyres etc. In fact in the last picture, one has the rear door open. Can well imagine their state in the terrible Chennai heat!
Attached Thumbnails
How come the PSU banks are saving Jet Airways, but didn't do the same for Kingfisher?-kf1.jpeg  

How come the PSU banks are saving Jet Airways, but didn't do the same for Kingfisher?-kf2.jpeg  

How come the PSU banks are saving Jet Airways, but didn't do the same for Kingfisher?-kf3.jpeg  

How come the PSU banks are saving Jet Airways, but didn't do the same for Kingfisher?-mas.jpg  


Last edited by itwasntme : 29th March 2019 at 09:10.
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Old 17th April 2019, 19:32   #37
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Default Re: How come the PSU banks are saving Jet Airways, but didn't do the same for Kingfisher?

And that's that. Jet Airways will suspend operations as of 2230 tonight. That is, unless someone pulls a rabbit and infuses some funds.

Regardless of who has owned the airline and the many ways it may have been mis-managed, Jet Airways generally had one of the best service in Indian aviation.

https://timesofindia.indiatimes.com/...w/68922062.cms

Last edited by libranof1987 : 17th April 2019 at 19:33.
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Old 17th April 2019, 19:42   #38
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Default Re: How come the PSU banks are saving Jet Airways, but didn't do the same for Kingfisher?

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Originally Posted by libranof1987 View Post
Regardless of who has owned the airline and the many ways it may have been mis-managed, Jet Airways generally had one of the best service in Indian aviation.
+1. Irrespective of who did what, it was one of the few and earlier 'premium' airlines in India. Their food, service, and cabin comfort were consistently better than most other players in India.

Sad to see it go. :(
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Old 17th April 2019, 21:48   #39
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Default Re: How come the PSU banks are saving Jet Airways, but didn't do the same for Kingfisher?

In India only companies go bankrupt - never the promoter. We see that film run again and again. Ruias of Essar are another recent example. Take Bhushan Steel, Punj Lloyd, JP Gaur Group, Lanco Infratech and most notoriously the Ranbaxy brothers and so many others. Not seen a promoter or his family struggling in poverty or even thrifty living but the companies go belly up and the employees suffer unpaid wages. Do you think Naresh Goyal's wealth, other than his share in Jet Airways, suffers much in any way? And poor Mallya struggles to make ends meet in the GBP 18,000 a week allowance the UK Court has permitted him to live on i.e. Rs 8.5 crores a year. Oh the hardships we endure.

Last edited by V.Narayan : 17th April 2019 at 22:00.
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Old 17th April 2019, 22:02   #40
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Default Re: How come the PSU banks are saving Jet Airways, but didn't do the same for Kingfisher?

Jet airways finally shuts shop.


Message from CEO

Quote:
It is with deep sadness and with a heavy heart that we would like to share with you that, effective immediately, Jet Airways will be suspending all its domestic and international operations.

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.

Consequently, with immediate effect we are compelled to cancel all our domestic and international flights. This decision has been taken after painstaking evaluation of all alternatives and after receiving guidance and advice on the same from the Board of Directors of Jet Airways.

Over the last several weeks and months we have tried every means possible to seek funding, both interim as well as long term funding, to keep our operations going. Unfortunately, despite the very best of our efforts, we have been left with no other choice today.

A decision like this is never easy to make, but without the interim funding, which we have been repeatedly requesting for, we are simply unable to conduct flight operations in a manner that delivers to the very reasonable expectations of our guests, employees, partners and service providers.

After 25 years of sharing the Joy of Flying with Indian and International guests, Jet Airways and its Board of Directors have been forced to take this extreme measure, as prolonged and sustained efforts with lenders and authorities to ensure the sustainability of the airline did not yield the desired results.

But, tomorrow is another day and tomorrow provides us with new hope, new opportunity and new expectations. We know that India is better off with a flying Jet Airways, and so do our potential investors. With a smile on our face and pride in our hearts, we have become the flag-bearer of warm Indian hospitality the world over. We have fueled India’s economic engine enabling business travelers and tourists alike to traverse the world. Families and businesses have grown with Jet Airways and have come to love our people as much as our brand. Even in the toughest of times, we remain committed to putting you first and being committed to our Guest First philosophy.

We will now await the bid finalisation process by SBI and the consortium of Indian Lenders and will continue to support the bid process initiated by the lenders.

For assistance, essential services needed to support our guests and the re-commencement of the flight operations will be kept onboard until further notice.

Guests who are booked on our flights with travel on future dates will be informed via text message email or phone call to the contact details listed in the booking. Guests who are impacted by the temporary suspension of flight operations can click here to request for a refund for their confirmed bookings. In case you have booked through a travel agent, please reach out to your travel agent to process the refund.

We sincerely and profusely apologise for the disruption to your travel plans. We would like to thank you for your continued patronage, support and loyalty over the years.

We are hopeful that we will be able to bring the Joy of Flying back to you soon
Source: https://www.jetairways.com/informati...nt-update.html
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Old 17th April 2019, 22:38   #41
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Default Re: How come the PSU banks are saving Jet Airways, but didn't do the same for Kingfisher?

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Originally Posted by V.Narayan View Post
In India only companies go bankrupt - never the promoter...
Living, breathing embodiment of the quote: If you owe the bank $100, that's your problem. If you owe the bank $100 million, that's the bank's problem.

I'll be harassed to death if I miss a single payment on a minuscule loan, but these guys get to run an entire company into the ground, give the finger to everyone involved and walk away like nothing's the matter. And I constantly get told that I should be fine with all this, because these guys take all the risk and deserve the disproportionate rewards they get out of it. Go further and the 'C' & 'S' words are bandied about.
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Old 17th April 2019, 22:59   #42
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Default Re: How come the PSU banks are saving Jet Airways, but didn't do the same for Kingfisher?

^^^^
All entrepreneurs take big risks that also lead to job & GDP creation. Some biggies make take massive loans and defaulting on them an art. That doesn't make all entrepreneurs bad guys. I agree with your implied statement that some punishment or deterrence needs to be meted out to them.
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Old 17th April 2019, 23:14   #43
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Default Re: How come the PSU banks are saving Jet Airways, but didn't do the same for Kingfisher?

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Originally Posted by V.Narayan View Post
^^^^
All entrepreneurs take big risks that also lead to job & GDP creation. Some biggies make take massive loans and defaulting on them an art. That doesn't make all entrepreneurs bad guys. I agree with your implied statement that some punishment or deterrence needs to be meted out to them.
I neither intended to generalize nor imply that entrepreneurs don't take huge risks. I know two responsible ones, right on this forum. The idea that a lot of them appear to get a free pass when things go belly up, and that most lenders don't appear to do proper due diligence (or have enough safeguards in place) while handing out immense loans (which will often be written off or refinanced with public funds), grinds my gears.

I recently explored the option of taking a small car loan to make up a budgetary difference, and the only thing they possibly skipped asking for was a kidney as collateral (they'd probably settle for my first-born but I have no kids, ha!). Gross oversimplification, but when my ability to repay a small loan is scrutinized to death, shouldn't the standards for institutional lending be higher, not (apparently) lower or non-existent?
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Old 18th April 2019, 06:05   #44
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Default Re: How come the PSU banks are saving Jet Airways, but didn't do the same for Kingfisher?

I hope one of India's finest Airlines, The Jet Airways flies again. I really feel bad for the employees, travellers and the industry in general.

The so-called low-cost airlines have made flying affordable but the experience horrendous and the business unviable.

One must be crazy to operate a private airline in India when the Government funds a bleeding national carrier.
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Old 18th April 2019, 06:27   #45
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Default Re: How come the PSU banks are saving Jet Airways, but didn't do the same for Kingfisher?

Below are pasted the official statement of Jet Airways and flight path of the last flight of the current Jet Airways.
Having been a happy customer of the airline, all I can say is that I sincerely hope it flies again. I hope in the interim the staff are absorbed by other airlines.

1. Official statement by Jet Airways
How come the PSU banks are saving Jet Airways, but didn't do the same for Kingfisher?-image1-1.jpeg

2. Flight path of the last flight by Jet.
How come the PSU banks are saving Jet Airways, but didn't do the same for Kingfisher?-image2.jpeg
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