The death of Jet may help other airlines to survive.

So, Jet Airways, India's oldest private airline is dying a slow agonising death as it stopped all flights since yesterday. A catalogue of mistakes by the man who founded the airline, Naresh Goyal, such as buying loss making Air Sahara in 2007 and losing seat capacity by buying smaller planes, along with the misfortune of rising oil prices with a falling rupee sounded the death knell for the airline. Jet was struggling with debts of $1.2 billion and could not find a buyer who would bring in new capital or persuade its lenders to lend more money to keep its operations going. Between 2011 and 2013 banks, especially those in the public sector, were lending money to companies without caring whether they would be repaid, wrote Unnikrishnan and Kadam. "There was a time (2011-2013) when everyone rushed to give money to corporations, no matter what the credit perception was. Everyone expected a miraculous pick-up in the economy," said a former banker. As Governor of the Reserve Bank of India (RBI), Raghuram Rajan forced banks to declare their bad loans and and not to lend to those companies until their loans had been repaid. During the high growth years of 2006-2008 bank lending went up in the belief that growth will continue, so they were unprepared for the crisis of 2008, said Rajan in a written reply to a parliamentary committee. Jet is not the only airline with massive debt. Air India has a debt load of Rs 550 billion but is kept alive by regular transfusion of taxpayer money because it is owned by the government. Which means Air India can resort to unfair competition by reducing ticket prices without fear of failure. It has demanded Rs 90 billion, more than the total debt of Jet, from the government to be able to service loans maturing this year. Politicians see air travel as a luxury, catering to the rich, so they tax it heavily. Also because politicians and civil servants get to fly for free. Passengers have to pay a user service fee to the company running the airport. There is a baggage charge for x-ray screening of baggage.  There is GST on the base price of the ticket, lower for economy than on business class. There is excise duty on aviation fuel levied by the central government in addition to basic customs duty. States add their own taxes on aviation fuel, further raising costs. Compare with zero fuel tax in Germany which is a high tax country. The International Air Transport Association has repeatedly asked the government to reduce taxes on airlines but politicians refuse. Indians are very price sensitive and "the facts seem to suggest that regardless of increasing prosperity, we are still very much bottom-of-the-pyramid consumers", wrote M Sharma. The fall of Jet Airways may help other airlines by increasing prices of tickets. We hope so.