What was expected a few months ago has finally happened now.Jet airways has suspended its operations due to inability to raise further loans from the lenders.This event has generated mixed emotions.There is an opinion that it is a sad event as it has lead to unemployment for the staff of jet airways.Also, passengers who were going to board jet airways in next few months will now have to look for alternate flights which may cost them more.So, the collapse of jet airways is having adverse effect on people who were not directly related to its failure.This sentiment is quite reasonable and it may look justifiable to blame competitive aviation market for jet failure.
But is the competitive aviation market really responsible for jet’s failure? Here comes the second opinion which says that if an organisation is built on high cost structure it will eventually collapse in a free market economy.And more importantly, failure of jet airways doesn’t signify failure of Indian aviation market.India is world’s third largest aviation market in terms of domestic traffic just behind US and China.Also, it is growing at an amazing rate of 16 to 20 percent each year.Further regional connectivity has improved as more and more Indian cities have got added to the aviation network.
How all of this has happened? What made Indian aviation market grow from nowhere to a leadership position?
It is India’s evolving respect for Market reforms that has given an Indian a choice to fly rather than travel by train and spend more hours on the same.Jet airways’ failure is a very important statement in Indian market.Once market is open, even proximity to government cannot save an inefficient organisation.Jet airways have always been known to use its influence on government policies like 5/20 rules, barring foreign airlines etc.However, if even half the effort it would have put in rationalizing its cost structure, it would not have seen this day.Therefore, Jet airways collapse should be celebrated because it shows that only efficiency will be rewarded and not any other feudal factor which are still present in many of the Indian organisations.
Regarding unemployment, it is very temporary phenomenon in a market which is growing at such an astounding rate.A growing market will require more air crafts, more airports and more supporting infrastructure.It also means that the staff will get eventually absorbed in other organisations who will require their skill set to expand their operations.Yes, this temporary phase is very emotional and we should have full sympathy for those who have suffered because of this event.But let us not get overemotional and reward inefficiency by bailouts or any other regulatory measure.
Let us remember that if Indians are able to fly more frequently today, it is not because of Air India or Jet Airways or kingfisher airlines.It is because of spice jet and Indigo who have also faced stiff competition but have managed to sustain because of their operational efficiency despite not having deep pockets like the traditional players of India’s aviation market.Thus, It is time Indians should gracefully accept failure of Jet airways as a mark of India’s appreciation for efficiency, good management principles and passenger experience where only those who can provide the aforementioned at the right price will prevail in the contemporary Indian economy.