by Florine Roche
Mar 26: Founder of Jet Airways Naresh Goyal, 69, considered to be a pioneer in India’s fast growing aviation industry, stepped down from the company’s board on March 25, 2019 along with his wife Anita. His resignation, though, marks the end of an era in the glamorous civil aviation industry, has given a new lease of life to the cash strapped Jet Airways which Goyal founded 25 years ago. For Naresh Goel it wasn’t an easy decision to step down from the company he founded with his relentless and untiring efforts to make it a leading player in the Indian aviation industry. He was left with no other option as the resignation of the Goyal couple and one nominee of Etihad Airways which holds 24 % stake in the company, was a pre condition to initiate a bailout plan.
A consortium of lenders headed by State Bank of India as per the bank led resolution has taken control of the company by acquiring 50.1% stake and are now looking for a new investor. With this the banks will be able to infuse Rs. 1,500 crores to the debt ridden company which has an outstanding debt of over Rs. 6000 crores. Following his resignation shares of Jet Airways rallied as much as 18 per cent within a day, a positive development to the beleaguered company as efforts are on extricate it from the present financial mess. The bullish reaction is a positive development as it removes major obstacles for creditors who want to rejig the company with a new professional team to head the organization.
For Naresh Goyal the 25 year journey at the helm of Jet Airways, India’s second biggest airline in term of market share, has indeed ended on a sad note as he also ceases to be its chairman following his resignation. Sad because it is painful to walk out from company he built in 1993 singlehandedly having earlier struggled as a ticketing agent for a number of airlines. He tried everything including approaching India’s richest man Mukesh Ambani in his personal capacity in an effort to salvage the fortunes of his cash-strapped company, without success.
His rise as a major player in the aviation sector is often termed as a journey ‘from street to sky’ as he built the company from scratch. Goyal was born in Sangrur, Panjab into a family of prosperous jewelers. He was only 12 when his family went bankrupt following auction of their property and he along with his mother moved to live with his uncle. He was interested in studies and in the absence of electricity at home he had to depend on streetlight to further his dreams. He had the ambition to be a Chartered Accountant but had to forego his dreams and settle for a B Com degree due to financial constraints. After graduation he joined his maternal uncle’s travel agency East West Agencies in 1967 as a cashier on a salary of Rs. 300/- per month.
His hard work, dedication and diligence yielded rich dividend and in 1969 his career got a big break when he was appointed as the Public Relation Manager of Iraqi Airways. He went on to serve many other Airlines till 1974 which t gave him ample opportunities to travel overseas and also to undergo extensive training in the field of travel business. By now Naresh Goyal was ready to take a major decision that made him what he is today despite Jet Airways debt saga reaching a crucial phase.
Armed with the rich experience Naresh Goyal decided to be his own master and after borrowing some money from his mother who pawned her jewels he formed his own travel agency – Jetair, the precursor to the Jet Airways he founded in 1993. Jetair represented leading and prestigious airlines like Air France, Austrian Arlines and Cathay Pacific in sales as well as marketing. Having picked up the ropes of the aviation industry he put his 25 years of experience to good use and Jetair was transformed into Jet Airways when India’s action sector witnessed a boom after India opened up its economy. The company began its operation as an air taxi operator and in 2004 it added international flights to its service. He was passionately committed to set up a professionally managed airline in the country, the one that matched the best in the global industry. Quality, efficiency, consistency, punctuality, good operational management and reliable service were the hallmark that helped build brand Jet Airways.
In addition to providing excellent quality service on the lines of global standards Goyal used his acumen to get political patronage cutting across political parties. It is said that he openly hobnobbed with influential politicians and elected representatives to stop low cost airlines including Air Deccan from taking off saying low cost airlines are unsafe. Ironically it is the influx of low cost airlines that proved to be the undoing of Naresh Goyal. He was also accused of putting road blocks on the proposed Tatas-Singapore airline venture in collusion with successive Civil Aviation Ministers. Government run Air India was also had to face the brunt of the political proximity Goyal enjoyed with politicians of all hues. He was able to expand his airline rapidly courtesy his free access to corridors of power which enabled him to secure important international routes which were under government control. By acquiring Air Buses and Boeings he expanded his fleet much to the envy of his rivals in the aviation field. By now Jet Airways had acquired a passenger market share of 21 per cent and was sitting pretty well. From just a fleet of four aircrafts flying to just over 12 destinations to start with, Jet Airways had reached its zenith having 124 aircrafts connecting people to over 550 global destinations. A laudable effort indeed!
An overriding ambition to rule the skies of India and the hasty decision to acquire Sahara Airline hastened the downward trajectory of Jet Airways. When waves of economic reforms began to sweep across India low cost airlines like Spice Jet, Indigo, Go Air entered Indian aviation market despite the well orchestrated efforts of Naresh Goyal to keep them off. With budget airlines already in the Indian skies Jet Airways thought it wise to compete with them when his plans to keep them out did not succeed. As a result Jet Airways lost its premium tag it has built so assiduously. It was s forced to give up its premium services and also had to slash ticket prices bringing it on par with low cost airlines. It was a big blunder for Jet Airways from which it could not recover. His move to buy Air Sahara by going for an overpriced deal to keep other low cost airlines at bay was another wrong business move and that proved to be the beginning of the final downfall of Jet Airways. The prolonged legal battle with Sahara Airline for violating the contract compounded the merger plan and put Jet Airways in a cesspool of complete mess.
After stepping down from the board of the Company Naresh Goyal in an email letter to his 22,000 odd employees has said “looking back I wouldn’t want to change a thing” suggesting that he had enjoyed his stint being at the helm and couldn’t have done better. Given the prevailing conditions of the company it is prudent on his part to bow out and save his company.
In building a world class Airline Naresh Goyal faced many ups and downs and quite a few challenges which he withstood until the debt trap felled him. Charges were made against him accusing him of having underworld links and that it was not possible to ascertain the source of his funds. But he was able to come out of all these allegations without hurting his reputation. No doubt Naresh Goel has stepped down from Jet Airways. It is a ‘small sacrifice’ he had to make in the larger interest of Jet Airways - the labour of love he built along with his wife. It remains to be seen how the banks will be able to infuse professionalism and revive the debt laden airline.
All said and done Naresh Goyal deserves a pat on the back for giving India a truly world class airline.
It is sad that such great personality who brought revolution in the airlines industry is going through a tough time in terms of self-respect and prestige issues. This is a good story to read on British Asia News