Jet Airways, India's most renowned private airline that ceased operations in 2019, and its chairman and founder, Naresh Goyal, made headlines for fairly disparate reasons recently. While the bidder for the airline Jalan Kalrock Consortium (JKC) reportedly deposited a much-delayed payment of Rs 100 crore with lenders that was due as part of its revival terms, the Enforcement Directorate arrested him on the allegation of money laundering to the tune of Rs 538 crore involving Canara Bank, a public sector entity.
JKC’s payment is part of its revival terms, leading to some raised hopes that the carrier’s never-ending restart plans might actually come to fruition. In July 2023, Jet Airways had managed to obtain a renewal of its air operator’s permit (AOP) from the director general of civil aviation (DGCA) after the previous one obtained in May 2022 expired without the airline managing to kick-start operations.
In 2019, soon after the airline was grounded, Goyal and his wife were prevented from flying out of the country — their passports confiscated — for investigations that seemed to be yielding very little till last week.
Revival ? What Revival ?
As someone who has closely covered Jet Airways and its trajectory, having met and known many members of its top management over two decades including Goyal and as a beat reporter in the late 1990s and early 2000s, I have a few observations to make.
Initially, Sudhir Gaur, the first CEO tasked with getting the project going along with a few other Jet staffers, threw his hands up in December 2021 after losing faith in the revival efforts. After several months without leadership, the revival team managed to persuade Sanjiv Kapoor, a former senior manager at SpiceJet and Vistara, to leave his stable position at the Oberoi group and become CEO in April 2022. However, Kapoor's tenure lasted just over a year, and despite their perseverance, JKC failed to get the airline flying again or to pay full salaries to existing employees. Consequently, over time, many staffers have left and no replacement for Kapoor has been found either. Among other factors, this too raises questions about why the so-called revival plan is still being considered viable by some stakeholders.
It's interesting that neither the aviation industry nor the government truly expects the airline to make a comeback, even if it manages a brief revival, as there are no assets left aside from the Jet brand name. Yet, the consortium continues to pursue it and has recently renewed its AOP (Air Operator's Permit) after the last one expired. "If there's a method to this madness, it remains unclear to anyone those who are working there or to any of us in MOCA (Ministry Of Civil Aviation)," said a senior MOCA official on the condition of anonymity and described the situation as a never-ending charade.
Initially, it was believed that the Jet Airways revival was being fueled by shareholders hoping to recover losses from previously higher-priced shares. They counted on any positive news about the company to boost the stock price. However, this scenario now appears less likely, according to sources, because the recent increase in the stock price has been minimal. Jet Airways shares have remained steady at around Rs 60 for several months.
How Goyal Built Jet Airways From Scratch
If the revival of the airline seems “damned” so does the future of Goyal, the man who gave India its much-loved private airline. Last week, he was arrested by the authorities based on a fresh money laundering case filed in July this year, presumably after previous investigations yielded little. Goyal has been held in India since May 2019 and investigation into his misdoings started back then.
In Goyal’s defence, I’d like to highlight that he not only operated the best airline among his competitors, including Kingfisher, Sahara, Go First, and Deccan, but he also treated his employees, both Indian and expatriates, exceptionally well. He provided stable employment in a professionally managed set-up for many years and showed respect and dignity to all his employees, which cannot be said for some of his counterparts. His commanders, crew and even senior management have often been labelled as “too pampered” when they moved on to work for low-fare airlines. While he may not have been a model of financial or moral probity, he was never a despicable, mercenary boss either.
Originally from Sangrur in Punjab, he came from a very humble background and rose through the ranks to build what many of his more privileged and seasoned counterparts failed to do — a formidable airline that quickly became a force for the public sector-run and financed Indian Airlines to contend with. Jet Airways as a product and service went on to enhance India’s image in global aviation circles with many airlines trying to emulate what Goyal built from scratch and with practically no resources at his disposal.
At a personal level, Goyal is a charmer to whom drama came naturally along with a gift for gleaning people’s weaknesses, which helped him offer them whatever would help the wind blow steadily in his direction, no matter which government was in power. A former Jet Airways board member described him quite aptly saying, “NG — as he is widely known — is cut from the same cloth as a Charlie Chaplin, wise, sensitive yet a bit comical.”
Protracted Investigations, Little Proven
Other than the fact that the investigation into his misdoings has often seemed directionless and prolonged beyond reason, many argue Goyal has done nothing the Indian system does not perpetuate to safeguard and further his business over the years.
It has over time been alleged that he used political connections to influence policies in his favour, a practice that is common for Indian businesses. It has also been alleged that he siphoned or laundered money, again not unheard of in India’s corporate context. It is now further alleged that some of this public money has been diverted for personal use. Through the years of running the airline, there were murmurs of him offering financial and other incentives to government officials or politicians to keep his airline afloat but how many Indian corporates or businesses can claim never to have done this to stay in the game?
All of the above remain allegations and nothing has yet conclusively been proven. Most observers and former staffers — many of whom are Goyal’s staunch supporters — believe that he is being singled out as it is not clear if the nature of Goyal’s misdemeanours are graver than his peers or beyond “business as usual”. They point to the fact former Kingfisher Airline chairman Vijay Mallya remains a fugitive, although he has been found culpable.
The broader view about the situation with Goyal in the aviation industry is that he is being made into a scapegoat. This is partly because the company’s fall from grace was more a result of the changed market dynamics rather than Jet Airways being a poorly run, hollowed-out company. Many argue that the evidence that Goyal’s intentions were not malafide lie in the fact that he continued to hold a majority stake in the company during stormy weather.
If the ED can prove its allegations conclusively, it can impose an appropriate financial penalty on Goyal but perhaps grant impunity from a jail term in view of his larger contribution to Indian aviation. Many of his supporters argue that to jail him even briefly at his age and stage seems both inconsiderate and even malafide. Moreover, instead of picking the easiest targets, the authorities need to focus on fixing the system that perpetuates and overlooks the way business is often conducted so that such episodes are not repeated. Don’t shoot the messenger.