JET AIRWAYS

Airline Industry in India

454 airports and airstrips
(includes Operational, Non Operational, Abandoned and
Disused Airports)
 127 are owned & operated by AAI
 16 - international, 7 custom airports, 28 civil enclaves
 Scheduled domestic air services - available from 82 airports

May 2007- May 2008

 25.5 million domestic & 22.4 million international passengers
 20% growth – highest in the world

Growth Rate Projections (for next 5 yrs)

 15% p.a (Passenger Traffic)
 11.4% p.a (Cargo Traffic)
 History
1911 First commercial flight
Airmails from Allahabad to Naini(10 km)
1932 The Aviation Department of Tata Sons Ltd. Established
1938 Tata Airlines (successor to aviation division of Tata
Sons)
1946 Tata Air Lines converted into a public Company and
renamed Air India Limited
Air India International incorporated
1948

Nationalization of Aircraft Industry

1953
 Air India (serving the international sectors)
 Indian Airlines (serving domestic sectors)
 Deccan Airways, Airways India, Bharat Airways,
Himalayan Aviation, Kalinga Airlines, Indian National
Airways and Air Services of India
 History
1986 Private Sector Players permitted as Air
taxi operators
 Players including Jet, Air Sahara, NEPC, East West,
Modiluft,etcstarted service
1990 Open Sky Policy
1994 Private Carriers permitted to operate scheduled services
2003 Entry of low-cost carriers
2007 Merger of Indian Airlines into Air India
Acquisition of Air Sahara by Jet Airways
2008 Kingfisher acquired 49% stake in Deccan Aviation
 Regulatory Authorities
Ministry of Civil Aviation
 Responsible for the formulation of policy, development and regulation of Civil
Aviation. Its functions also extend to overseeing airport facilities, air traffic
services and carriage of passengers and goods by air

Other Attached/Autonomous Organizations:

Directorate General of Civil Aviation (DGCA)

 Promote safe and efficient Air Transportation through regulation and proactive
safety oversight system

Bureau of Civil Aviation Security (BCAS)

 Regulatory authority for civil aviation security in India

Airport Authority of India (AAI)

 Accelerate the integrated development, expansion and modernization of the
operational, terminal and cargo facilities at the airports
 Policies
Open Sky Policy
FDI
 Airports
 100% for green field operations
 74% for existing airports - 100% with special permissions
 100% tax exemptions for 10 yrs.

 Airlines
 49% in domestic airlines - 100% for NRI’s
 74% in cargo & non-scheduled airlines
 Market Share in Domestic
Market

In Post Consolidation Jet includes Air Sahara & Kingfisher includes Air Deccan
§Market Share is based on their Capacity Source: B&K Securities
 Service vs. Price
High
Jet Airways

Kingfisher Indian Airlines

Full
Service
Air Deccan

SpiceJet

Go Air Indigo

Low
Low High
Price

Source : http://www.foolonahill.com/mbaaviation.html
Cost Structure

Source : http://www.foolonahill.com/mbaaviation.html
 Jet Airways
Founded in 1993, Chairman - Mr.Naresh Goyal

HQ in Mumbai
 Country’s second largest international airline
 Largest domestic airline - 31%

Primary base - Mumbai's Chaatrapathi ShivajiAirport

Secondary hubs - Bangalore, Brussels, Chennai, Delhi,
Hyderabad, Kolkata and Pune.

April,2007 - Acquired Air Sahara - JetLite

Now JetLite integrated into Jet Airways

International Network
Domestic Network
Fleet Plan
Jet Airways - Performance
Annual Revenues - Rs.9481.5 crores (2007-08)
Rs.7401 crores (2006-07)

Profit(Loss) After Tax - Rs.253 crores loss (2007-08)

Rs.27 crores profit (2006-07)
- All Other Domestic Players showed loss(2006-07)
Operational Highlights
Revenues & Expenditure Split-
up
Jet Airways vs. Domestic Players (2006)
Jet Airways vs. International Players
(2006)
 STP
Primary Segments (Geographic) - Domestic & International

Customer Segments
 First class, Premiere(Business) class & Economy class

Target Segments
 Premiere(Business) class
Business travelers, contribute 48% of passengers & 66% of revenues,
ready to pay higher prices, last time booking, don’t like transit
 Economy class
Leisure travelers, prefer low cost airlines, ready for transit if there is cost
advantage, large % of passengers

Seat Allocation – Yield Management Technique

Positioning – High value for High price

Unique Selling Price – Customer relationship and Punctuality

Seating in flights for
Segments
Fleet Size
Flower of Services
Information - Reg. the org., flight schedules, ticket fares, promotion
schemes etc.
Through website, call service, sms, employees etc.

Consultation - Reg. the choices of class, routes to a destination & special

menus for frequent fliers

Order taking - Booking - through phones, fax and internet

- Ticket Office, Call Centres, Company Website & Agents

Hospitality - Most important differentiating factor (from ticket booking

t o post flight help)
Safe keeping - Luggage & Children

Exceptions - Special requests reg. meal preferences, special amenities

for elderly people or children, medical needs etc.

Billing - Charges split, E-mail bills etc.

Payment - Credit card, Travellers cheque, Special payment privileges

for frequent fliers
Impact of IT on Ticket Booking
Levels of Product
 Product - Service
On Ground Services
 Check in options - Airport check-in, Tele Check-in, Web Check-in,
Kiosk Check-in, SMS Check-in, Check-in while walk-in,

One Time Check-in on Return Journey, Through Check-in

 Airport Lounges
 Coach Services

In-flight Services
 Classes of Service - First class, Premiere class & Economy class
 Convenience & Safety -Towels, Pillows & Blankets, Reading material,
First Aid, Smoke detectors, Bassinets, Child Care, life jackets & seat cushion
 Cuisines
 Entertainment - Jetscreen– Movies, TV programmes, Games, Music, In-flight
communicator, Online magazines etc.
 JetWings (in-flight magazine), JetBoutique (in-flight shopping catalogue)
 Product - Service
Special Services
o Infant and child care, wheel chair assistance, expectant mothers,
unaccompanied minors, medical emergencies, travelling with animals &
carriage of stretchers

JetMobile

JetKids

JetEscapes

Cargo
 JetPrivilege – Frequent Flyer
Program
Membership tiers – Blue, Blue Plus, Silver, Gold & Platinum
 Personalized web access
 JP Miles - 13 quarters validity
 Bonus JPMiles on e-Services
 Additional baggage allowance
 Guaranteed reservations up to 24 hrs. prior to departure
 Waiver on cancellation fees
 Membership Tier Bonus

Earning & Redeeming JP Miles

 Eg: Chennai to Thiruvananthapuram (Earn Mile-383 & Redeem Mile-6894)
 Airline Partners - Air France, American Airlines, ANA, Austrian Airlines,
Brussels Airlines, Cathay Pacific, Dragonair, Etihad Airways, Gulf Air,
JetLite, KLM, Lufthansa, Northwest Airlines , Qantas, South African
Airways, SWISS, United Airlines and Virgin Atlantic.
 Price
Economy & Club Premiere Fare
Discounted fare for senior citizens & defense personnel
Advance Passenger Excursion/ APEX Fares
One Fare
Night Saver Fares
Check Fares
US Dollar Fares & Visit India Fares
 Place
Place of Service - Aircraft

Various Destinations
 Promotion
Offers
 Companion Free Offer, One Fare, Concessional fares, JetPrivilege Offers,
Jet Airways Citibank Credit Cards, Corporate Deal Offers, International
Specials, Camp Rock contest, Festival specials, Student specials, Surprises etc.

Advertising and Branding

 Hoardings
 Brand Ambassadors
 Sponsorships
 Event Organization
 People
Employees
 Pilot, Cabin Attendants, Engineers, Customer Service Agents, Securities,
Marketing, Sales & Reservation employees

Customers
 Partners
Airline Partners - Air France, American Airlines, ANA, Austrian Airlines,
Brussels Airlines, Cathay Pacific, Dragonair, Etihad Airways, Gulf Air, JetLite,
KLM, Lufthansa, Northwest Airlines , Qantas, South African Airways, SWISS,
United Airlines and Virgin Atlantic.
Code Share Partners - Air Canada, All Nippon Airways, American Airways,
Brussels Airlines, Etihad Airways and Qantas
Co-Brand Cards - CitiBank
Conversion Partners - BarclayCard, CitiBank, Deutsche Bank AG, HDFC Bank,
HSBC, ICICI Bank, SBI Card & Tata Cards
Car Rental Partners - Avis, Hertz
Hotel Partners - Global Hotel Alliance, Hilton Family Hotels, Hyatt Hotels &
Resorts, InterContinental Hotel Groups, ITC etc.
Lifestyle Partners - Globus and Golf Fee Card International
Publishing Partners - Fortune, The Economist and TIME
Retail Partners - Ferns n Petals
Telecommunication - Matrix Cellular Services
 Competitors

International market - British Airways & South West Airlines

Domestic market - King fisher, Indian Airlines, GoAir,

Spicejet & Indigo
 Process
People Processing

 People physically enter the service system to receive the service. Aircraft is the
service factory where service is delivered.

Possession Processing

 Cargo
 Luggage & Courier
 Physical Evidence
Servicescape
 Servicescape usage - Interpersonal
 Complexity of Servicescape - Elaborate

Flight
Offices - Org. & Ticket Booking Agents
Virtual Servicescape
Service Quality

Source : http://www.foolonahill.com/mbaaviation.html
Service Quality

Source : http://www.foolonahill.com/mbaaviation.html
Strategies to manage the Capacity &
Demand
Check Fares
Automated Rostering System
Planning and Scheduling Systems
Code Sharing
Outsourcing ramp handling, passenger handling, ticket
checking, cargo and loading and unloading in Delhi and
Mumbai
Automation to drive efficiency and improve response time
Faster page and application download times for its site
 Corporate Social
Resposibility
Magic Box
 Fund raising inside the flight for disaster relief, education &
healthcare for poor and programmes to prevent exploitation
of women

Flights of Fantasy
 Underprivileged children and children with special needs are
taken on specially organized flights (on Children’s Day)
 PEST Analysis
Political Issue Social Effects
 License issue for international  Sound Pollution
operation
 Plane hijacking
 Infrastructural constraint
 9/11 Incident
 ATF price policy

Economic Effects Technology Effects

 Rising income level  Modernization of aircrafts
 Reduced fare but yet not enough  Modern technology like CAT3
and ILS
 SWOT Analysis
Strengths
 Market driver Opportunities
 Experience exceeding 14 year  Untapped air cargo market
 Scope in international service and
 Only private airline with
international operation tourism
 Market leader
 Largest fleet size

Weaknesses Threats
 Loosing domestic market share  Strong competitors
 Old fleet with average age around  Fuel price hike
4.79 years  Overseas market competition
 Scope for improvement in
in-flight service
 Weak brand promotion
THANK