Waiting for Godot

With no knight in shining armour on the horizon, Jet Airways' days seem numbered

Samuel Beckett would have been distressed to see his drama, Waiting for Godot, come alive here in India. The philosophical Vladimir and weary Estragon are waiting for Godot to arrive. Both ramble and bicker but to no avail. All manner of other characters come and go but the two lead characters remain unmoving till the end. Godot never shows up. 

For readers unfamiliar, the play by Beckett is built around the human condition as it is, in all its mystery and absurdity, urging humans to bear it with dignity because there are no easy solutions to the mysteries of existence. 

To me, the parallels with Jet’s present situation are unmistakable. The airline is facing the crisis of its life. SBI chief Rajnish Kumar and Co. or some unnamed magical investors are supposed to rescue it. Etihad has threatened to leave but sees no real benefit of it either. It has no skin in the game anymore. 

However, in this case, there is a twist in the tale. What Goyal and others don’t realise is that even if Godot arrives, he’s unlikely to offer any solutions. This ship is sinking regardless.

Let me elaborate. I no longer see any hope of recovery for Jet. Even as the banks have decided on an auction, the airline is merrily grounding its fleet and cancelling flights like there’s no tomorrow. To give an idea of how grim things are, there is currently no direct Jet flight from Bengaluru to Delhi.

I have no idea why newspapers and the media are still claiming that Jet’s dues are Rs 8,000 crore or thereabouts but my sources tell me that the total outstanding is closer to Rs 28,000 crore or US $4 billion. This includes Rs 9,500 crore of debt with accumulated interest, Rs 15,000 crore of outstanding dues to all vendors, suppliers, lessors, employees and the taxman and Rs 3,500 crore for ticket refunds payable for all the cancellations. 

In its best year, IndiGo made a profit of Rs 2,100 crore (in 2016-17). Oil prices were low and conditions for airlines were generally favourable. Even if this kind of miracle was to happen for Jet Airways, how does one recover in today’s aviation scenario after running up an outstanding of this magnitude?

Moreover, with Goyal no longer in charge and assuming he’s the root of the problem, I don’t see how a management with little or no previous experience is expected to perform better than one with years of cumulative domain expertise. Will just a change in management reverse the airline’s fortunes ? I don’t see how.

Jet’s situation is far more alarming in other ways too. In 2014, when SpiceJet was going down, its Boeing fleet came down from 42 to 18. But most of these aircraft were returned to lessors and so the airline was no longer paying lease rentals or parking charges on these planes. Then, as soon as Ajay Singh took over, almost all expensive resources were laid off so the salary bill came down. Oil prices, too, were a good sport. In general, conditions for recovery were quite favourable.

In the case of Jet, almost 50 B737s are on the ground and lease rentals and parking charges are accumulating for the last few months. There have been very few top level exits so the salary dues and arrears are heading north. Oil prices, although not high, are volatile. So, most costs stay the same but the operation has shrunk. In other words, revenues will head downwards while costs stay stubbornly high. It can only mean a redder balance sheet.

Understandably, there is panic among the staff. Twenty six of the 400 senior first officers and commanders who applied to SpiceJet have been hired by the airline. IndiGo has hired an unconfirmed number as well and is paying for their type rating training to operate its Airbus fleet. IndiGo, where the relationship between pilots and management is at best fragile, has even had to issue a message to its own pilots to allay rumours of preferential treatment being given to the new Jet hires. 

The bankers — pushed by the government — have committed another Rs 1,500 crore to keep the airline afloat till the end of May, on account of the general elections. It’s a small price to pay to keep the decibel levels on TV channels, and the negative sentiment as a consequence, in check. But it is essentially a write-off. 

Needless to add, Godot remains as elusive as ever.