It looks like Jet Airways Ltd.’s luck has finally run out. India’s oldest privately owned airline is on the verge of shutting down all its flights -- it already has perhaps fewer than 10 aircraft active -- because it simply doesn’t have enough working capital.

It’s more than a billion dollars in debt and has lost money for the last four quarters. On one level, you could argue that this is a good sign for India: Its institutions are holding up. State-owned banks are Jet’s biggest creditors and they seem unwilling to throw more money at the airline without a ...