Jet Airways

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

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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 1932 1938 1946 1948 1953

First commercial flight Airmails from Allahabad to Naini(10 km) The Aviation Department of Tata Sons Ltd. Established Tata Airlines (successor to aviation division of Tata Sons) Tata Air Lines converted into a public Company and renamed Air India Limited Air India International incorporated Nationalization of Aircraft Industry 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 

1990 1994 2003 2007 2008

Players including Jet, Air Sahara, NEPC, East West, Modiluft,etcstarted service

Open Sky Policy Private Carriers permitted to operate scheduled services Entry of low-cost carriers Merger of Indian Airlines into Air India Acquisition of Air Sahara by Jet Airways 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.

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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

Full Service

Indian Airlines

Air Deccan SpiceJet Go Air

Indigo

Low Low

Price

High

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 Splitup

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 

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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)

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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 License issue for international operation  Infrastructural constraint  ATF price policy

Social Effects

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Economic Effects

Technology Effects

Rising income level  Reduced fare but yet not enough

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Sound Pollution  Plane hijacking  9/11 Incident

Modernization of aircrafts  Modern technology like CAT3 and ILS

SWOT Analysis Strengths     

Market driver Experience exceeding 14 year Only private airline with international operation Market leader Largest fleet size

Opportunities Untapped air cargo market  Scope in international service and tourism 

Weaknesses

Threats

Loosing domestic market share  Old fleet with average age around 4.79 years  Scope for improvement in in-flight service  Weak brand promotion

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Strong competitors  Fuel price hike  Overseas market competition

THANK