• A phenomenal and well-developed network both of the airline and the chairman
• Goyal's knowledge of the sector
• A massive pool of loyal customers
• Excellent lobbying skills and ability to leverage connections within government
• Ability to survive downturns earlier
• Financing raised on strength of own balance sheet
• Has built a professional organisation
• A perceived drop in service standards when pitted against Kingfisher
• Struggling with the carcass of Air Sahara
• Poor people management skills of chairman
• Inability to raise money for the last two years
• Superior product on ground; in the air Jet ...view middle of the document...
And if Jet has never had a problem raising money before, Mallya has group United Breweries (with a market capitalisation of $5 billion) backing him.
In 2006, Jet's initial troubles were compounded by its messy buyout of Air Sahara which many feel was simply a move to thwart Kingfisher from acquiring it. Against the advice of his senior colleagues, Goyal offered Rs 2,300 crore (Rs 23 billion) for it, a pretty high price for the airline.
"It was like a bee in his bonnet. Once he set his mind to it, he refused to back down, even though everyone warned him it wasn't a great buy," says a senior official who has since left Jet.
As was widely predicted, Jet's share price reacted adversely and has never recovered to what it listed at. The company's total market capitalisation following the announcement of the Sahara deal fell from over Rs 10,000 crore (Rs 100 billion) to Rs 4,558 crore (Rs 45.58 billion).
The moment the deal was called up, the share price recovered somewhat - a clear indication of what the market thought of the Sahara buy, but even today it is trading below the price at which it listed.
At roughly the same time the civil aviation ministry threw open international routes to private carriers. Jet saw...