Airline failures are messy. Creditors are out crores of rupees with few hopes of recovering what is owed. Unpaid employees are forced to borrow to keep their families fed. Passengers are inconvenienced when confirmed flights are cancelled. Business meetings, family reunions, and vacations are disrupted.
The diminishing inventory of seats which results when airlines are in trouble — such as when the DGCA refused to schedule slots to Jet Airways for the busy summer season — provides incentives for competitors to raise prices.
We have seen this movie before with Kingfisher and SpiceJet. Jet Airways is simply suffering from a malaise that corporations in a market economy face: it is not generating sufficient cash to repay its debts and obligations.
