Jet Airways bailout: Why the airline's second take-off may be doomed

On paper, the plan looks like it may work. Yet Jet shares, which have dropped 70 per cent over the past year, haven't reacted

For Jet Airways India Ltd., it’s always only about one rupee.

As I wrote last month, the troubled full-service carrier needed to garner an additional 1 rupee (1.4 cents) per available seat kilometer to make up for its cost disadvantage against no-frills rivals. Cutthroat price competition denied it that opportunity, and now banks are picking up a majority stake – at a price of 1 rupee for 114 million shares.

The gamble, which seeks to avoid putting India’s oldest private airline into court-administered bankruptcy, will be put to a shareholder vote on Feb. 21.

Beyond that, the details of the rescue plan are