What do you see as the big challenges for Jet Airways as it is taken over by a new management?

Jet, even after the acquisition assuming that the Kalrock deal happens will have a tough road ahead for a number of reasons. Firstly, aviation is one sector that is the worst hit by the pandemic and that is likely to have a lag impact on the business.

Conservatively it is estimated that the total losses for the aviation industry on account of the pandemic could be closer to Rs.24,000 crore of which Rs.17,000 crore would be incurred by the airline companies alone, most of them are likely to get into negative net worth.

In short, the airline industry is going to take a long time to revive and that is not good news for Jet Airways, which is already struggling. On the one hand, it is racked by debt and idle assets, More than anything, Jet needs favorable market conditions to revive.

Then there is the worry over the outcome of the haircut. Jet reportedly owes Rs.27,000 crore to employees and operational creditors. Haircuts are inevitable, but the question is how much would be OK? If employees are asked to take huge haircuts, they will lose good people. The other option is to lose supplier credit, tough math too.

Apart from all these tough choices, Jet also needs to get back all or most of its favoured slots, its market share in the aviation market and get its fleet up and running. Even with the deal going through, the real grind for Jet could start from that point.