FAILURE OF JET AIRWAYS

JET AIRWAYS
• Jet Airways (India) Ltd. was an Indian international airline based
in Mumbai, India which on 17 April 2019 has suspended all flight
operations. As of October 2017, it was the second-largest airline in
India after IndiGo, with a 17.8% passenger market share. As of July
2019, the company is undergoing insolvency proceedings
under Insolvency and Bankruptcy Code, 2016
 COMPETITORS
1. Domestic Competitors:
• Indigo
• Go Air
• Spice Jet
• Air India
2. International Competitors:
• British Airways
• Delta Airlines
• United Airline
 SWOT ANALYSIS
1. Strength
• • Strong presence & good name
in the Indian Aviation market.
• Taking the plane on lease rather
than purchasing.
• Readymade distribution network.
• Innovation in services.
• Experience exceeding 20 years.
• Large fleet size.
• Among top 3 in India
WEAKNESS:
• Salaries was not high as
compared to other airlines so
difficulty to retain employees.
• Financial not sound as
compared to others airlines.
• Loosing domestic market share.
• Weak brand promotion.
• Need improvement in in-flight
services.
• Old fleet average age 4.78
years.
3. Opportunity 4. Threats
• Untapped air cargo • Ongoing economic weakness.
market. • Rapid increase in fuel prices.
• Scope in global services • Strong competitors.
and tourism. • Overseas market competition.
• Increasing salaries of • Regulations
employees.
 • Marketing Strategies
• Focus on improving service, reliability and on time performance.
• Measures to negate effect of unprecedented increase in prices of fuel
• Maintain its leadership position in the Indian aviation industry
• Improve On-time performance.
• Explore the potential for sustained growth in Indian passenger traffic
because of low penetration in the medium to long term.
• Keep operations and growth in line with expected Indian economy growth
which is around 7% – 8% per annum
• Manage risk & short term crisis on account of any global financial risks
• Manage short term spike in crude oil prices.
• Minimize passing the fuel price fluctuation to customers.
• Network expansion will be around the key focus specially Gulf and Middle
East.
 REASONS FOR FAILURE
• Purchase of Air Sahara in 2006 for $500 Million in Cash
• Poor Management
• Low-Cost Carriers Were Underestimated
2) Poor Management
• Fluctuation in Oil Prices and Fall in Rupee
• Failure to Find an Investor
How will Jet’s Failure aFFect tHe
Economy?
Effects due to the closure of a big airline will not just be restricted to employees and
shareholders. It is going to have a major impact on the economy as a whole, as it results in
loss of jobs, rise in unhealthy competition and increase in airfare, as other airlines would try
to fill up the void created.
The loss of job of one employee would affect 5 others in the value chain. Jet Airways has
nearly 16,000 employees, this means, loss of work for 80,000 people.
Jet’s closure is posing a major challenge to avoid price surge, especially in the holiday
season due to lesser domestic capacity. Other airlines are putting in their efforts to
increase capacity, but immediate results cannot be seen.
Further, fuel suppliers, airport operators and other vendors would lose a customer. Airports
across the nation, GMR infrastructure Ltd, GVK Group and other similar organizations would
lose out on revenue, which is earned through parking and landing charges.