 | « Back to article | Print this article |
'By August 2018, it was evident that Jet was heading into serious financial trouble.'
'Why didn't the DGCA stop all advance bookings right there and then?' asks Anjuli Bhargava.
The Jet saga raises many questions and the government of the day needs to answer them.
Even as the Jet saga reaches its closing chapter, I have a few questions for anyone willing to answer.
First, can someone please tell me what is the net worth of Jet's former chairman Naresh Goyal? Even if he is a non-resident Indian, a government with the kind of might this one is displaying can surely find out. A precise number would be nice.
There are two possible answers. One, it could be awfully low, like what befits a promoter who has run his business rather unsuccessfully for a majority of the 25 years. I don't know how much that number should be but I'm not the expert here. Let someone else decide.
The second possibility -- and one everyone always hints at in hushed tones for some reason -- is that NG -- who started as a sales agent -- has actually got a lot richer over the last 25 years even as his company got steadily poorer. Now, how does one manage this feat?
Can someone explain it to me in some detail so I too can launch a business, bleed it silly and get richer myself in the process?
How precisely does one get richer as one's main businesses get poorer and poorer?
I'm making no accusations here, but of late the record of Indian promoters on stuff like this has been somewhat dodgy. All I am suggesting is that it may be worth investigating.
Two, why allow businesses to take advance payments for services not yet delivered in cases where the future of the business looks rather shaky?
Let me use the Jet example to illustrate.
Typically, airlines take advance bookings for almost one year up front and the money from sales of future air tickets that comes in is used for its operations. That's business as usual.
As I understand it, almost 30 per cent of the airline's cash requirements are met through advance bookings.
Now Jet too has taken bookings up to a year in advance, Seats have been sold that you and me have paid for on the understanding that we will be taking this flight somewhere in the coming year. So, our money is locked in with the airline.
But even as the airline -- and here the regulator has to answer -- looking as shaky as this, no one tells the airline to stop taking advance bookings.
By August 2018, in this case, it was evident even to a dummy that Jet was heading into serious financial trouble.
Why didn't the DGCA stop all advance bookings right there and then?
Why allow the airline to collect Rs 3,500 crore (that's the figure for ticket refunds doing the rounds) when it cannot ensure that the flights it is promising will take off?
That means that passengers have shelled out Rs 3,500 crore with no surety of ever seeing their money again.
Someone needs to explain why. We are not Jet's privy purse here, even if the government is eager to be.
Three, what about the experience of the Jet passengers in Amsterdam who reached the airport to find they are not about to fly anywhere as the aircraft they were hoping to board has been seized by the lessor! This to my mind really took the cake and the icing with it.
Anyone who has flown to Europe knows how far these countries keep their airports from their city centre. Everyone knows it's not easy to make your way to the airport with luggage in tow. This is not India -- it can cost a fair bit.
Now imagine this. You check out (and probably can't get a room again even if you want one later in the day), get your luggage together, travel by public transport (unless you are an Indian airline owner!) and reach the airport for a flight you booked six months ago. And guess what ?
Phew, this is really the stuff nightmares are made of.
The other day I reached Delhi airport from Vasant Vihar and found my flight cancelled and no message on my phone informing me that it was cancelled and I went ballistic. So I can only imagine how this poor lot hoping to leave Amsterdam and reach Mumbai felt.
I've paid for this flight six months ago and this is what I get. The airline is so broke it certainly can't pay for my hotel stay in Amsterdam or somewhere near the airport.
I am stranded in Europe with my luggage: All dressed up and nowhere to go. Not a happy situation at all.
So, here are my three rather short suggestions :
One, instead of wasting time on trying to sell what appears more and more like a comatose asset (barring some miracle or an Ajay Singh), find out NG's net worth.
Two, wake up DGCA. He simply must wake up. Airlines going belly-up is business as usual. We cannot have a regulator that sleeps through it all.
Three, let refunds in cases like the Amsterdam-Mumbai case be three times what the passenger paid for his or her ticket. You can't compensate people for the sheer frustration one feels but tripling the refund amount may make other sinking airlines more wary in the future.
Take bookings and advances only if you are reasonably sure you can deliver.
