The document summarizes a case study on the rise and fall of Jet Airways, India's first private airline. It discusses Jet Airways' founding in 1992 and early success as India's leading private carrier. However, overambitious international expansion, the costly acquisition of Air Sahara, underestimating low-cost carriers, excessive control by founder Naresh Goyal, and failure to adapt to rising costs and competition led to financial troubles. By 2017, Jet Airways had accrued major losses, grounded most of its fleet, and was forced to cease operations, marking the end of its dominance in the Indian aviation industry.

1. Lecture 1
Case Study-Jet Airways
Business
Awareness

2. Subject Objectives
By the end of this session, we will be able to
Develop critical
thinking and problem
solving skills
Develop the ability to
present your thoughts and
interact within groups
Demonstrate understanding
of the importance of Business
Awareness in today’s
business environment
Apply basic concepts,
techniques, and methods
relevant to the
management of business
Uncover problems and
opportunities for
improvement in Business
with enhanced analytical
skills and ability

3. Case Study

4. Jet Airways: ‘Come Fly With Me’ To ‘Flying Without Wings’
 History – The Takeoff of Jet Airways
 Success of Jet Airways
 Jet Lite
 Crisis
 Reason behind the crisis
 SWOT Analysis
 Recommendations

5. History – The Takeoff of Jet Airways
 The airline was founded by Mr Naresh Goyal
on April 1, 1992
 It commenced its first flight on May 5, 1993,
 When it commenced its operations, it was the
only carrier in the private sector. There was no
Vistara, Sahara, SpiceJet or IndiGo to
challenge its monopoly There couldn’t be a
better time to be up in the air
 Its last trip on April 17, 2019

6. Success of Jet Airways
Received its scheduled airline
status on January 14, 1995
1996-1997, had grabbed
second-highest share of 20%
It made a record of flying
more than 2.3 million
passengers in two years
In 2001, became first buyer of
Boeing 737-400 and leading Indian
carrier to operate more than 195
flights to 37 Indian destinations
It was the first Southeast
Asian airline to boast of a
737-800 in its fleet
Within a short span of five
years of its commencement,
It was flying twelve Boeing 737
aircraft to twenty-three domestic
destinations daily for more than
eighty-three times!

7. Jet Lite
 In 2006, the Jet Airways wanted to acquire
another cash-starved airline Air Sahara
 In 2007, Air Sahara was rechristened as
JetLite
 Proposition to middle-class segment and
new-age cash-conscious customers of India
 JetLite was a wholly-owned subsidiary of Jet
Airways and a full-service aircraft line

8. Jet Konnect
 The airline collaborated with Kingfisher
Airlines for Frequent-Flyer Program,
 Sharing of the crew and ground-handling
equipment and along with code-sharing for
flights
 It also launched Jet Konnect, another low-cost
brand of ATR 72 and Boeing 737 to operate on
profitable routes and with a higher load of
passengers in 2008

9. Crisis
End of 2013, however,
brought airline to face the
fight of survival
Airline had to cease
operation due to incurring
losses in 2017
Majority of its fleet was
grounded for non-payment
as it failed to abide by lease
agreements
The founder Mr. Naresh
Goyal and his wife Anitha
Goyal resigned from their
posts of Board of Directors

10. Reason Behind the Crisis
1. Starting point: Naresh Goyal and his wife Anita started Jet
Airways in 1993. At the time, the Indian aviation industry
was just taking off and their only formidable opponent was
state-run Air India. Goyal's pitch was ensuring the
country's biggest private carrier had impeccable service -
a world-class product built in India
2. International expansion: Aviation experts say that Jet
airways problems began when it embarked on an
aggressive international expansion plan. The carrier
ordered 22 wide-body aircraft for delivery over about 18
months, starting in 2006, depleting cash, an executive
associated with the airlines told Business Standard
3. Air Sahara acquisition: Other experts argue that Jet
Airways financial troubles started with the purchase of Air
Sahara for $500 million in cash, also in 2006. Naresh Goyal
went ahead with the purchase despite being advised
against it by his associates, news agency AFP said in a
report. His advisors said he was paying too much for Air
Sahara, the agency reported. The budget carrier was
rebranded "JetLite" but it led to a massive loss of money.
In 2015, Jet Airways wrote off its entire investment

11. Reason Behind the Crisis
4. Competition: The experts say the Jet management
underestimated low-cost carriers like IndiGo, SpiceJet
and GoAir. They were offering tickets at a lower price.
They also launched flights on new routes, but Jet focused
on corporates
5. Etihad stake: In 2013, Jet was close to running out of
cash, but survived collapse when Abu Dhabi's Etihad
Airways bought a 24 percent stake in the Indian airline.
As part of the deal, Etihad also bought three pairs of Jet's
landing slots at London's Heathrow airport and 51
percent stake in its frequent flyer program
6. Luxury service, low cost: To compete with low-cost
carriers, Jet lowered prices without reducing its
expensive services.
7. Poor management: Aviation experts also questioned
Naresh Goyal's management style. They said his decision
to have a single management team, headed by himself,
running all Jet's operations was a crucial mistake. The
experts said the management spent more than it earned

12. Reason Behind the Crisis
8. Global crude prices and weak rupee: The fluctuations in
global crude prices might have also contributed to its
collapse. The situation was made worse by the weak
rupee, which ensured higher fuel costs for the airlines
9. Lack of adaptability: Soaring oil costs and the Indian
rupee hitting record lows last year affected all Indian
carriers. But the others were more resilient. Jet Airways
failed to manage its balance sheets and was caught out
by these cyclical changes in the industry, Mumbai-based
economist Ashutosh Datar told the international news
agency
10. Lack of investors: Goyal's penchant for control, which
helped him build the airline, has been a stumbling block
for potential investors. Aviation analysts say Goyal's
failure to find a strategic investor to pump money into
Jet extended the airline's losses. Talks with Tata group
failed last year, while Etihad Airways reportedly refused
to increase its stake because Naresh Goyal was at the
helm

13. SWOT Analysis
Strength
 Only private airline with
operations on international routes
 High credibility and substantial
brand value in market
 Recognised for its quality and
punctual services
 Extending fleet size to
accommodate new demands
Opportunities
 Domestic market
 Long haul flights
 Bankable and useful modern
technology
 Comfortable and spacious
plane seats
Weakness
 Underwhelming domestic market
share
 Sudden transition to grab domestic
market share when faced
competition from low-cost carriers
 High prices for economy class
 Not responding to challenges of
low-cost airlines in time
 Failing to understand Indian
consumers’ mindset
Threats
 Saturation in tourism
 Reduced fair but not considerably
enough for middle-class
 Increasing wages, operational
and overhead costs to maintain a
fleet
 Competition from international
carriers

14. https://www.cidm.co.in/jet-
airways-case-study/
References:

15. https://www.indiatvnews.com/b
usiness/news-jet-airways-crisis-
explained-in-10-points-516066
References: