The immediate crisis in Jet Airways has been warded off for now, with Naresh Goyal, his wife and the Etihad representative stepping down from the Board and lenders providing it a lifeline by infusing ₹1,500 crore.

However, it might be too early to celebrate this new lease of life as the real issues for Jet start now — the most significant of which is finding a long-term solution .

Analysts believe that after this cash infusion, depending on how smartly the money is usedand how much additional revenue is generated by flying more planes and concentrating on profitable routes, the airline can keep going for 3-4 months at least. This, however, will not help the airline deal with, what an industry watcher calls, the fundamental problems Jet has been facing. These include high costs, an ageing wide body fleet and the pressure that rival are exerting on it.

Positives for Jet

A clearer picture of who is interested in Jet Airways will emerge only by April 19 when the expression of interest is made public.

All domestic airlines would be keen on getting a piece of Jet Airways as it has a huge number of slots within the country and abroad. Another factor that favours Jet is the large ‘Frequent Flyer’ base the airline has managed to build over the years.

It could be leveraged by another carrier if it were to pick up a stake in Jet Airways.

Some argue that it makes sense for SpiceJet to acquire the airline as there is fleet commonality — both Jet Airways and SpiceJet operate a Boeing fleet.

Probable suitors

Incidentally, SpiceJet is said to be in talks with leasing companies to take over many of Jet Airways’ aircraft, which are currently grounded for non-payment of lease rentals. Others say with the amount of free cash that IndiGo is sitting on it could look at buying Jet Airways to grow as a company. Announcing its latest financial results in January, IndiGo had said that it had a strong balance sheet with total cash of ₹14,136.1 crore, including free cash of ₹4,618.3 crore and restricted cash of ₹9,517.8 crore as on December 31 last year. Jet’s current liability is around ₹8,000 crore. They, of course, need to overcome some practical difficulties . Both SpiceJet and IndiGo are low-cost airlines. If either f them buys Jet, one question that is most likely to arise is that whether Jet Airways staff will be able to meet the new owner’s requirements of turning around the aircraft for the next flight in about 30 minutes which is something that low-cost airlines try to achieve to sweat their planes to the maximum .Even the mindset involved in running a low-cost and a full service airline is different. Meshing the two will be a tall order.

Further, the world over the experience of buying or integrating an existing airline with a new one has not always been pleasant .

In India, the merger of Air India with Indian Airlines and Jet’s acquisition of Air Sahara did not have happy endings. “Integration issues in an airline merger are always a nightmare,” a senior official said .

Will integration work?

Arvind Jadhav, Chairman and Managing Director of Air India, had told a Parliamentary committee in 2010 that nowhere in the world had any merger really been successfully completed. “If you take the Delta-Northwest airlines, today if you go to the United States and ask the pilot or a cabin crew he will say, ‘I am a Deltan. I am a North-western.”

How Jet’s future pans out remains to be seen. , At the moment, Jet staff and the flying public can breathe a temporary sigh of relief as a a short-term solution has been found.

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