Jet case odc section c_group 9
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Jet Airways was founded in 1992 by Naresh Goyal and began operations in 1993. It received scheduled airline status in 1995 and went international in 2004. Problems in the early 2000s included a loss of staff and passengers due to the post-9/11 climate and increased competition from Air Sahara. While Goyal's leadership helped build Jet Airways, his hands-on management style began to hinder growth. By focusing on cost cutting over innovation, Jet lost its competitive edge and brand identity, becoming vulnerable to competitors like Air Sahara. However, Jet Airways rebounded in 2008 with fleet expansion plans and international code-sharing agreements, aiming to connect cities like Mumbai and Shanghai.
Jet case odc section c_group 9
- 1. Ishpreet Singh – 12P139 Karan Jaidka – 12P141 Lucky Sharma – 12P145 Prabhat Singh– 12P154 Vignesh Patil – 12P177 Viswanath Kuppa – 12P180 PGPM – Section C – Group 9 1
- 2. Introduction Founder: Naresh Goyal Timeline:- April1,1992 - Jet Airways is formed & operator license for air taxi May 5,1993 - Commenced operations 1995 - Gets a scheduled airline status March,2004 - Jet Airways goes International March,2005 - Jet Airways goes public April,2007 - Acquires Air Sahara - Jetlite 2
- 3. Problems being faced in 2003 Turbulence: 50% of ground-staff has quit; Jet losing cabin crew and ground staff to foreign carriers Fall in number of passengers post 9/11 Load factors suffering Increase in fuel prices decreasing margins Sahara taking on Jet’s dominance 3
- 4. The Stalwart named Naresh Goyal Very successful GSA Manages most of the operations himself Is energetic, rustic, bold and impatient Made Jet a world class airline by 2000 Built a vast network of contacts, attended every IATA meeting These relations helped in setting up Jet Airways Best decision – To hire expatriates for critical functions Audacious decision – To buy 10 Boeing aircraft, with 10 more in the pipeline, given the poor condition of the industry after 9/11 4
- 5. Problems with Goyal’s style of Leadership This style of leadership is now causing problems as the airline grows (stifling growth; facing problems of retaining managers) Persistent instability in the top management – clueless shifting of people around, based on personal appraisal Unfamiliar with processes and standards Ad-hoc style of functioning 5
- 6. The Rise of Sahara – at the cost of Jet Jet had to prune costs an bring down break-even levels Jet cut down salary hikes, refresher training, released 6 expats and leased out 2 aircraft Jet stopped innovating, focussed on cutting costs Sahara took centre-stage as Jet began to stagnate Poor timing for Jet to stop innovating (possibly due to Goyal’s failure to have a decision-making structure at the top) Jet did not alter its pricing strategies during the price war 6
- 7. Forces for and against Change at Jet Airways Forces for change Forces against change Competitive pressure Lack of delegation of authority Hire external expertise Founder too involved in daily activities Foreign alliances Cost reduction & layoffs Bold investments Informal power structure 7
- 8. Consequence of change/no change at Jet Airways Failed to keep customers satisfied Loss of competitive advantage Vulnerable to attack from competition Lost “Innovative” brand identity 8
- 9. Jet Airways’ Rise in 2008 Fleet size = 81, average fleet age = 4.2 years (among the lowest globally at that time) Massive international expansion plan Goyal’s mission, focus and experience came in very handy International strategy included tying up with the region’s domestic carrier; as many as 120 code-sharing agreements globally Goyal planned to fly to Dubai and on the Mumbai- Shanghai-San Francisco route Jet’s aircraft preference = 787-9 Dreamliners and Boeing 737-400s 9
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