India’s Grounded Carriers Tell Us How Not To Run An Airline

Hailed as a symbol of rapid growth, India's aviation industry remains mired after repeated airline collapses, highlighting the sector's persistent volatility and structural challenges.

These events have left the sector at a crossroads, underscoring the challenges of operating in one of the world’s most dynamic yet unforgiving markets. From the dramatic collapse of Kingfisher Airlines in 2012 to the more recent implosion of GoFirst and the liquidation of Jet Airways, the cautionary tales remain alarmingly relevant as the industry enters 2025.

The story of Kingfisher Airlines, founded by the flamboyant Vijay Mallya in 2005, showcases how ambitions should match ground realities. Celebrated for its luxurious offerings and groundbreaking marketing, Kingfisher aimed to disrupt the market with a premium experience.

However, beneath the glitz and glamour lay a foundation riddled with over-expansion and mismanagement. Mallya’s ambitious foray into international markets and the costly and ill-advised acquisition of budget airline Air Deccan diluted Kingfisher’s brand identity and strained its operations.

The Kingfisher Saga

Financially, Kingfisher was a ticking time bomb. Its lavish spending on high-end services, surging fuel costs, and mounting debt made the business model unsustainable in India’s price-sensitive market. By 2012, as creditors closed in and its operating license was revoked, Kingfisher had become the poster child for how not to run an airline. Mallya’s self-imposed exile and the unresolved financial disputes left the airline rudderless and deep in debt. 

Mallya, who managed to grow his liquor business to a great height, assumed that he could repeat his success in the airline business, too. However, both industries work on entirely different parameters. The liquor business is about spending millions to promote its products even though above-the-line advertisements are banned in India, and the profits are huge. In the airline industry, the margins are wafer-thin, and one starts making profits after several years in the business and, therefore, needs to pay pincer-like attention to every cost.

Vulnerable GoFirst 

Fast forward to 2023, and the sudden bankruptcy filing of GoFirst sent another shockwave through the industry. GoFirst, formerly GoAir, was initially positioned as a reliable, low-cost carrier but became a victim of external vulnerabilities and operational mismanagement. The airline’s over-reliance on Pratt & Whitney engines proved catastrophic when mechanical failures grounded nearly half its fleet. 

Despite its claims of having met debt obligations, GoFirst’s liquidity issues spiralled out of control, leaving the airline unable to recover from operational disruptions.

Even with the backing of the Wadia Group, GoFirst’s failure to navigate these challenges exposed several flaws in its crisis management and contingency planning. In a market dominated by low-cost leaders like IndiGo, Go First’s inability to maintain operational stability and adapt to competition proved fatal.

The industry’s woes deepened further with the liquidation of Jet Airways in 2024, marking the end of a protracted and ultimately futile attempt to revive the airline. Once a dominant player, Jet Airways ceased operations in 2019, only to be overtaken by the Jalan-Kalrock Consortium in 2021.

Hopes of a revival dimmed as the consortium struggled to meet financial commitments mandated by the Insolvency and Bankruptcy Code (IBC). The Supreme Court’s ruling against the consortium in 2024 sealed Jet’s fate, with its legacy reduced to yet another cautionary tale in the annals of Indian aviation.

Crippling Operational Costs

Jet Airways’ story highlights the crippling impact of high operational costs and volatile external factors, including fluctuating fuel prices and currency depreciation. The airline’s failure to secure a viable path to profitability, even with a revival strategy, underscores the critical importance of aligning operational realities with financial commitments.

As of today, the collective lessons from these high-profile collapses remain a pressing concern for new and existing players in India’s aviation sector. 

Financial prudence has become a non-negotiable tenet for survival. Airlines must prioritise maintaining robust balance sheets and controlling operational costs, particularly as the global economy faces uncertainties.

Strategic clarity is equally essential—new entrants must avoid the pitfalls of brand dilution and focus on carving out a transparent and sustainable niche.

The failures of GoFirst and Jet Airways also reinforce the importance of crisis management and supplier relationships. GoFirst’s reliance on a single-engine supplier and its inability to navigate operational disruptions serve as stark warnings for other airlines.

Meanwhile, Jet’s drawn-out liquidation highlights the critical role of regulatory compliance and transparent engagement with creditors and authorities.

Opportunity Vs Risks

India’s aviation sector, bolstered by a growing middle class and rising demand for air travel, remains a land of opportunity. 

However, as the collapses of Kingfisher Airlines, GoFirst, and Jet Airways illustrate, the risks are equally significant. For new entrants and established players alike, the lessons of the past decade are clear: success in India’s aviation market demands more than ambition—it requires strategic foresight, disciplined execution, and an unyielding focus on resilience. 

As 2025 unfolds, the industry faces a pivotal moment to redefine its trajectory and avoid repeating the mistakes of its troubled history.