The Jet Airways Story


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Case Details:

Case Code : BSTR022
Case Length : 9 Pages
Period : 1992 - 2002
Organization : Jet Airways
Pub Date : 2002
Teaching Note : Available
Countries : India
Industry : Aviation

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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"If we keep our passengers happy, they will keep us in business."

- Ernest Collette, General Manager, (Service Quality), Jet Airways, 2001.

"There is no doubt that Goyal has played his cards well."

- Vinod Kashyap, Joint MD, Indian Airlines, 2001.

Flying High in the Indian Sky

By 2001, with revenues of $542.18 million, (Refer Exhibit I), Jet Airways (JA) had emerged as the most popular domestic airlines in India.

JA started its operations in 1993; the number of its passengers increased from 0.663 million in 1993 to 5.9 million in 2000-01.

By 2001, when other private airlines such as Modiluft, East West, NEPC and Damania had stopped their operations, JA not only continued to survive, but had become a formidable competitor to India's national domestic airlines—Indian Airlines (IA). JA seemed to be the lone challenger to IA with Sahara Airlines in the third position.

JA's market share increased to 42% in 2001 from 6.6% in early 1990s (Refer Table I).

In 2001, JA ran 215 flights per day compared to IA's 208. Unlike the loss making IA, (Refer Exhibit II), JA is making profits. At the end of the first year, JA achieved average seat factor close to break-even level of 71%.

Thereafter it broke even and has been making profits ever since. In 2001, JA recorded profits of Rs 125 million compared to IA which recorded a loss of Rs 1.77 billion1 (Refer Exhibit III). JA became a favorite with travelers because of its friendlier approach and new generation cleaner planes more importantly, seasoned air travelers were confident that if they have crucial appointments to keep in other cities, JA was reliable than IA. JA's on-time performance and schedules attracted business travelers who accounted for 80% of its customers. JA had a fleet of 33 planes in 2001, (Refer Table II), as against IA that had a 57 planes. But JA's fleet was much younger and the average daily flying time of JA was greater than IA. Greater utilization meant higher revenues and a more efficient utilization of capital assets.

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1] In September 2002, Rs 48 equalled 1 US $.

 

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