Naresh Goyal's Turbulent Ride From Ruling Indian Skies To Hopeless Imprisonment

"Teary-eyed and dejected, aviation veteran Naresh Goyal felt so hopeless about the system that he told a special court last week that he would prefer to die in prison. For a man who ruled Indian skies, that's quite a fall.There was a time when any major aviation policy by the government was speculated to have the prints of the erstwhile poster boy of Indian aviation. Goyal's airline, Jet Airways, once dominated the Indian skies, but a few wrong bets, competition from a set of low-cost carriers and volatile market conditions ended his flight.Hailing from Punjab, Goyal started his career in the late 1960s in a relative's travel agency. He quickly learned the ropes and set up Jetair Pvt. in 1974 to provide sales and marketing services to foreign airlines. After representing global giants such as Cathay Pacific and Air France for years, he established Jet Airways soon after the Indian economy was liberalised..When Jet Airways launched commercial operations in 1993, its competitors were Damania Airways, Sahara India or Air Sahara, ModiLuft and East-West Airlines, along with government-owned Indian Airlines and Air India. The Indian market, however, proved to be a graveyard for carriers. None of Jet Airways' original private peers survived.'He knowingly or unknowingly caused more harm to Indian aviation than good through his ways of functioning,' Jitender Bhargava, former executive director of Air India, told NDTV Profit. 'Goyal prevented airlines from starting operations and later growing by creating stumbling blocks through political clout and influence in the policymaking—only to thwart competition.'The 5/20 policy formulated by the government can be cited as one major example of that, according to Bhargava.The policy required carriers to complete five years of commercial operations and own 20-aircraft fleet to begin international operations. No other country had such a rule.Goyal, according to sector watchers, was even said to be behind derailing Air India's divestment in early 2000s. Imagine the state of Indian aviation today if Air India's disinvestment would've gone through, Bhargava said. Emirates and Etihad wouldn't have flourished in the Indian market to the extent they have if only Air India, through privatisation, had been allowed to become a formidable airline, he said.The Tata Group, along with Singapore Airlines, had withdrawn the proposal after criticism from trade unions and political backlash.As a result, Jet Airways climbed higher and gained domestic market share, backed by its world-class service with no other airline to match it.The next step was going public, which it executed successfully. Its initial public offer was subscribed 4.25 times on the first day..Indian market changed with the launch of new carriers such as InterGlobe Aviation Ltd.'s IndiGo, Air Deccan, SpiceJet and Go Air (now Go First). As the number of flyers increased, low-cost became the name of the game and the quality of services took a back seat.Feeling the threat from budget airlines, Goyal overplayed his hand by acquiring Air Sahara for Rs 2,200 crore. After the expensive acquisition, Jet Airways' costs began to balloon on international routes.Rapid network expansion, not enough in-house talent and price war among low-cost carriers created the perfect storm that rocked Jet Airways.The 2008 financial crisis hit demand and oil prices soared. Jet Airways, already burdened with rising costs, resorted to heavy borrowing..When Kingfisher Airlines was in dire need of funds and Vijay Mallya was pleading the government to allow foreign airlines to buy stake in domestic carriers, Goyal was reported to be against such a policy and denied the need to tie-up with a foreign carrier. When Mallya's Kingfisher stopped commercial operations in 2012, Jet Airways' efforts for survival came under the spotlight.Conveniently, Goyal changed his view: 'Today, I may not need FDI, but tomorrow I may need,' he was quoted as saying. In another 'twist of fate' that year, Jet Airways got a booster as the government changed its foreign direct investment policy. It allowed foreign airlines to own up to 49% stake in Indian carriers, just when Goyal was hunting for more funds to keep Jet Airways going. Etihad Airways acquired 24% stake in Jet Airways for Rs 2,000 crore when India and Abu Dhabi agreed to increase flights under the bilateral agreement.But that respite didn't last. Over the next few years, IndiGo's business model, led by single aircraft and frugal operations, became something to imbibe to run a sustainable and profitable airline. Jet Airways again needed funds.In April 2019, a consortium led by State Bank of India refused to inject more funds in Jet Airways as it crumbled under huge debt and years of loss. Etihad didn't come to rescue either this time.At the time, Jet Airways operated over 120 aircraft and flew on hundreds of routes. And the airline was grounded and ceased operations.Soon after, the lenders initiated bankruptcy proceedings against the airline and the National Company Law Tribunal admitted the case in June 2019.Allegations came to the fore that Goyal was siphoning funds from the airline. Jet Airways' board, which included Goyal and his wife, had to step down. The Enforcement Directorate began examining Etihad Airways' investment in Jet Airways, reportedly on claims of violation in foreign direct investment rules. Goyal was barred from leaving India..In May 2023, Canara Bank filed a complaint with the Central Bureau of Investigation, accusing Goyal of cheating, criminal conspiracy, criminal breach of trust, and criminal misconduct.Based on the CBI's FIR, he was arrested in September by the Enforcement Directorate for alleged fraud of Rs 538 crore. The case has since been heard in a special court.When Goyal first emerged in the aviation scene, many pointed to his charming ways and how he had the potential to become Indian aviation's face after JRD Tata. Years later, during the hearing last week, he stood with folded hands and bowing before the court to express how he's missing his bedridden wife in the jail. 'He came before the court with continuous tremors in his whole body and hands,' the judge said. The 74-year-old said his wife is bedridden and their only daughter is unwell, too. Referring him to JJ Hospital would be useless and he conveyed reluctance to travel to hospital from the Arthur Road jail.Meanwhile, the National Company Law Tribunal has allowed the Jalan-Kalrock Consortium to take over and revive Jet Airways. It appears the airline may have more chances of flying again.Even a hopeless Goyal may find some solace in that thought."

Naresh Goyal's Turbulent Ride From Ruling Indian Skies To Hopeless Imprisonment

Teary-eyed and dejected, Naresh Goyal felt so hopeless about the system that he told a special court he would prefer to die in prison. For a man who ruled Indian skies, that's quite a fall.

NDTV Profit

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Naresh Goyal's Turbulent Ride From Ruling Indian Skies To Hopeless Imprisonment

Teary-eyed and dejected, Naresh Goyal felt so hopeless about the system that he told a special court he would prefer to die in prison. For a man who ruled Indian skies, that's quite a fall.

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