Jet case odc section c_group 9


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Jet case odc section c_group 9

  1. 1. Ishpreet Singh – 12P139 Karan Jaidka – 12P141Lucky Sharma – 12P145 Prabhat Singh– 12P154Vignesh Patil – 12P177 Viswanath Kuppa – 12P180 PGPM – Section C – Group 9 1
  2. 2. Introduction  Founder: Naresh GoyalTimeline:- 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. 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. 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. 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. 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. 7. Forces for and against Change at Jet Airways Forces for change Forces against changeCompetitive pressure Lack of delegation of authorityHire external expertise Founder too involved in daily activitiesForeign alliances Cost reduction & layoffsBold investments Informal power structure 7
  8. 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. 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
  10. 10.  10