How do you go from running a thriving airline, customers loving you, flying to 65+ cities worldwide, having 44% of the Indian market, to shutting down?
Why did Jet Airways fail? Why 15 years later after launching, they were grounded, broke, and buried under a mountain of debt?
Jet Airways’ story is basically a masterclass on how NOT to run a business when the market shifts under your feet.
Let’s walk through it.
Going Back to When it All Started
Back in the 2000s, Jet Airways was the airline everyone wanted to fly.
Top-notch service, nice food, polished branding (remember “The Joy of Flying”?), and people were willing to pay premium for it.
But soon they got cocky.
In 2006, Jet pulled off what was probably one of India’s worst aviation deals.
They bought Air Sahara for ₹2,000 crore (about $500 million).
Why? Not because Sahara was some brilliant business move, but largely because Jet’s founder, Naresh Goyal, wanted to.
A former Jet VP even admitted, “We had decided that it wasn’t worth it… Then he went to meet [Subrata] Roy and within half an hour called us to say that he had purchased Sahara. It was nothing but his ego at play.” – The Ken, 2023)
Here’s where it hurt: Sahara was a sinking ship.
Their planes were old, their operations were a mess, and Jet ended up not just buying the brand but taking on its repair bills, staff headaches, and debt.
And ₹2,000 crore is no small number, that’s the kind of cash that can fuel years of innovation if spent wisely.
Two Decades Later
Now, let’s fast-forward a bit.
You know how in India today, IndiGo rules the skies?
According to DGCA (India’s aviation regulator), as of 2024, IndiGo controls roughly 62% of the domestic market.
Jet had a shot at this dominance. But they didn’t see IndiGo as a real threat when it launched in 2006.
Why? Because Jet was busy focusing on corporate travelers, thinking people would always pick premium over price. Wrong.
When IndiGo and SpiceJet hit the market with bare-bones fares, price-sensitive travelers — students, families, budget tourists — flocked to low-cost carriers.
It’s like if you owned a gourmet coffee shop and a cheap but decent coffee chain opened next door, and you just shrugged, thinking, “Ah, they’re not our audience.”
But soon, even some of your regulars switch over because, well, coffee’s coffee, and why pay extra?
By the time Jet tried to play catch-up, it was 2013, and they jumped into a price war they simply couldn’t afford.
IndiGo was running a lean, low-cost operation, with smart aircraft leasing deals (called sale-and-leaseback, which keeps balance sheets light), while Jet was hauling around debt from bad deals.
Let me drop some actual numbers here:
- Jet’s debt went from ₹2,631 crore in 2005 to ₹14,280 crore by 2010.
- By 2018, their market share had collapsed to 15.5%.
- Profits? Forget it. They were bleeding losses since the 2008 economic downturn.
The Biggest Issue Remained ‘Leadership’
The biggest issue? Leadership.
Naresh Goyal ran Jet like a one-man show.
Ex-employees have repeatedly said he controlled everything, no real delegation, no empowered management layers.
And when cracks started to appear, he didn’t adapt fast enough.
You see, airlines (like any big company) need to evolve constantly. New tech, smarter cost models, better fleet management.
But Goyal clung to old ways, kept overspending, and ignored mounting debts.
Eventually, investors and partners, including giants like Etihad and Tata, walked away when Jet came asking for bailouts.
You can think of it like this: imagine your startup is tanking, and you pitch to investors saying, “Hey, we’re deep in debt, but give us more cash, and we’ll fix it!” But you have no solid recovery plan, no business model pivot, would they invest? Not likely.
When the crisis finally hit in 2019, Jet couldn’t even afford fuel or pay airports and vendors.
Here’s the brutal final nail:
“Late last night, Jet Airways was informed by the State Bank of India (SBI), on behalf of the consortium of Indian lenders, that they are unable to consider its request for critical interim funding.”
— Jet Airways official statement, April 2019.
They grounded flights, staff weren’t paid, and over 20,000 employees were left jobless.
What is the current situation of Jet Airways?
After two years of bidding rounds, the Jalan-Kalrock Consortium won the bankruptcy resolution in 2021.
In May 2022, Jet’s AOC (Air Operator Certificate) was revalidated.
But as of mid-2024, Jet still hasn’t fully relaunched commercial flights.
The brand has a name, but rebuilding trust, routes, and a market position? That’s a whole new mountain to climb.
Your Takeaways
If you’re building a business, here’s the practical takeaway from Jet’s collapse:
- Don’t assume success today guarantees success tomorrow.
- Don’t let ego dictate big-money decisions.
- Never underestimate new competitors, no matter how “small” they look.
- Keep your debt under control; if you’re over-leveraged, every downturn becomes deadly.
- Make sure your leadership structure allows flexibility and real, empowered decision-making.
These aren’t theoretical MBA lessons, this is exactly how Jet crashed, despite once being India’s airline king.
