Financial distress and bankruptcy of Jet Airways: accounting implications and lessons learned

The present study aims to highlight the causes of financial distress and bankruptcy of Jet Airways. This paper also highlighted the importance of financial distress prediction models. To describe the downfall of Jet Airways, financial statements and annual reports of the company were analyzed. The financial performance of Jet Airways was compared with the low cost airlines for the year 2018-19. Altman Z- Score (for non- manufacturing companies in emerging markets) for Jet Airways was analyzed from 2008- 2018 before the bankruptcy period 2018-19. It was found that the company was in financial distress since 2013-14 and the model was ignored, red signals were disregarded, proper strategic decisions were not taken and ultimately company lead to bankruptcy. It was found that the main reasons of the financial distress and bankruptcy of the company were large debts, cash shortage, huge competition with low cost airlines and high operating costs.