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Jet Airways
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- 2. Airline Industry inIndia454 airports and airstrips (includes Operational, Non Operational, Abandoned and Disused Airports)127 are owned & operated by AAI16 - international, 7 custom airports, 28 civil enclavesScheduled domestic air services - available from 82 airportsMay 2007- May 200825.5 million domestic & 22.4 million international passengers20% growth – highest in the worldGrowth Rate Projections (for next 5 yrs)15% p.a (Passenger Traffic)11.4% p.a (Cargo Traffic)
- 3. History191119321938194619481953First commercial flightAirmails from Allahabad to Naini(10 km)The Aviation Department of Tata Sons Ltd. EstablishedTata 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 IndustryAir 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
- 4. History198619901994200320072008Private Sector Playerspermitted as Air taxi operatorsPlayers including Jet, Air Sahara, NEPC, East West, Modiluft,etc started service Open Sky PolicyPrivate Carriers permitted to operate scheduled servicesEntry of low-cost carriersMerger of Indian Airlines into Air IndiaAcquisition of Air Sahara by Jet AirwaysKingfisher acquired 49% stake in Deccan Aviation
- 5. Regulatory AuthoritiesMinistry ofCivil AviationResponsible 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 airOther Attached/Autonomous Organizations: Directorate General of Civil Aviation (DGCA) Promote safe and efficient Air Transportation through regulation and proactive safety oversight systemBureau 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
- 6. PoliciesOpen Sky PolicyFDIAirports100%for green field operations74% for existing airports - 100% with special permissions100% tax exemptions for 10 yrs.Airlines49% in domestic airlines - 100% for NRI’s74% in cargo & non-scheduled airlines
- 8. Market Share inDomestic MarketIn Post Consolidation Jet includes Air Sahara & Kingfisher includes Air DeccanMarket Share is based on their Capacity Source: B&K Securities Service vs. Price HighJet AirwaysKingfisherIndian AirlinesFull ServiceAir DeccanSpiceJetIndigoGo AirLowHighLowPriceSource : http://www.foolonahill.com/mbaaviation.html
- 9. Cost StructureSource :http://www.foolonahill.com/mbaaviation.html
- 10. Jet AirwaysFounded in1993, Chairman - Mr.NareshGoyalHQ in MumbaiCountry’s second largest international airlineLargest domestic airline - 31%Primary base - Mumbai's ChaatrapathiShivaji Airport Secondary hubs - Bangalore, Brussels, Chennai, Delhi, Hyderabad, Kolkata and Pune.April,2007 - Acquired Air Sahara - JetLiteNow JetLite integrated into Jet Airways
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- 14. Jet Airways -PerformanceAnnual 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)
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- 16. Revenues & ExpenditureSplit-up
- 17. Jet Airways vs.Domestic Players (2006)
- 18. Jet Airways vs.International Players (2006)
- 19. STPPrimary Segments (Geographic)- Domestic & InternationalCustomer SegmentsFirst class, Premiere(Business) class & Economy classTarget SegmentsPremiere(Business) class Business travelers, contribute 48% of passengers & 66% of revenues, ready to pay higher prices, last time booking, don’t like transitEconomy class Leisure travelers, prefer low cost airlines, ready for transit if there is cost advantage, large % of passengersSeat Allocation – Yield Management TechniquePositioning – High value for High priceUnique Selling Price – Customer relationship and Punctuality
- 20. Seating in flightsfor Segments
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- 23. 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 fliersOrder taking - Booking - through phones, fax and internet - Ticket Office, Call Centres, Company Website & AgentsHospitality - Most important differentiating factor (from ticket booking to post flight help)Safe keeping - Luggage & ChildrenExceptions - 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
- 24. Impact of ITon Ticket Booking
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- 26. Product - ServiceOnGround 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 ServicesIn-flight ServicesClasses of Service - First class, Premiere class & Economy classConvenience & Safety -Towels, Pillows & Blankets, Reading material, First Aid, Smoke detectors, Bassinets, Child Care, life jackets & seat cushionCuisinesEntertainment - Jetscreen – Movies, TV programmes, Games, Music, In-flight communicator, Online magazines etc.JetWings (in-flight magazine), JetBoutique (in-flight shopping catalogue)
- 27. Product - ServiceSpecialServicesInfant and child care, wheel chair assistance, expectant mothers, unaccompanied minors, medical emergencies, travelling with animals & carriage of stretchersJetMobileJetKidsJetEscapesCargo
- 28. JetPrivilege – FrequentFlyer ProgramMembership tiers – Blue, Blue Plus, Silver, Gold & PlatinumPersonalized web accessJP Miles - 13 quarters validityBonus JPMiles on e-Services Additional baggage allowanceGuaranteed reservations up to 24 hrs. prior to departureWaiver on cancellation feesMembership Tier BonusEarning & Redeeming JP MilesEg: 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.
- 29. PriceEconomy & ClubPremiere FareDiscounted fare for senior citizens & defense personnelAdvance Passenger Excursion/ APEX FaresOne Fare Night Saver FaresCheck FaresUS Dollar Fares & Visit India Fares
- 30. PlacePlace of Service- AircraftVarious Destinations
- 31. PromotionOffers Companion FreeOffer, 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 BrandingHoardingsBrand AmbassadorsSponsorshipsEvent Organization
- 32. PeopleEmployeesPilot, Cabin Attendants,Engineers, Customer Service Agents, Securities, Marketing, Sales & Reservation employees Customers
- 33. PartnersAirline 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 QantasCo-Brand Cards - CitiBankConversion Partners - BarclayCard, CitiBank, Deutsche Bank AG, HDFC Bank, HSBC, ICICI Bank, SBI Card & Tata CardsCar Rental Partners - Avis, HertzHotel Partners - Global Hotel Alliance, Hilton Family Hotels, Hyatt Hotels & Resorts, InterContinental Hotel Groups, ITC etc.Lifestyle Partners - Globus and Golf Fee Card InternationalPublishing Partners -Fortune, The Economist and TIMERetail Partners -Ferns n PetalsTelecommunication - Matrix Cellular Services
- 34. CompetitorsInternational market -British Airways & South West AirlinesDomestic market - King fisher, Indian Airlines, GoAir, Spicejet & Indigo
- 35. ProcessPeople ProcessingPeople physicallyenter the service system to receive the service. Aircraft is the service factory where service is delivered.Possession ProcessingCargoLuggage & Courier
- 36. Physical EvidenceServicescapeServicescape usage- Interpersonal Complexity of Servicescape - ElaborateFlightOffices - Org. & Ticket Booking AgentsVirtual Servicescape
- 37. Service QualitySource :http://www.foolonahill.com/mbaaviation.html
- 38. Service QualitySource :http://www.foolonahill.com/mbaaviation.html
- 39. Strategies to managethe Capacity & DemandCheck FaresAutomated Rostering SystemPlanning and Scheduling Systems Code SharingOutsourcing ramp handling, passenger handling, ticket checking, cargo and loading and unloading in Delhi and MumbaiAutomation to drive efficiency and improve response timeFaster page and application download times for its site
- 40. Corporate Social ResposibilityMagicBox Fund raising inside the flight for disaster relief, education & healthcare for poor and programmes to prevent exploitation of womenFlights of Fantasy Underprivileged children and children with special needs are taken on specially organized flights (on Children’s Day)
- 41. PEST AnalysisPolitical IssueLicenseissue for international operationInfrastructural constraintATF price policyEconomic EffectsRising income levelReduced fare but yet not enoughSocial EffectsSound PollutionPlane hijacking9/11 Incident Technology EffectsModernization of aircraftsModern technology like CAT3 and ILS
- 42. SWOT AnalysisStrengthsMarket driverExperienceexceeding 14 year Only private airline with international operationMarket leaderLargest fleet sizeWeaknessesLoosing domestic market shareOld fleet with average age around 4.79 yearsScope for improvement in in-flight service Weak brand promotion OpportunitiesUntapped air cargo marketScope in international service and tourismThreatsStrong competitorsFuel price hikeOverseas market competition
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Editor's Notes
- #3 AAI – Airports Authority of Indiap.a – per annum
- #7 Open Skies means unrestricted access by any carrier into the sovereign territory of a country without any written agreement specifying capacity, ports of call or schedule of services. In other words an Open Skies policy would allow the foreign airline of any country or ownership to land at any port on any number of occasions and with unlimited seat capacity. There would be no restriction on the type of aircraft used, no demand for certification, no regularity of service and no need to specify at which airports they would land. Defined in this manner, it is not surprising that Open Skies policies are adopted only by a handful of countries, most commonly those that have no national carriers of their own and that have only one or two airports. No sovereign country of any eminence practices Open Skies least of all the European Union, UK, USA, Japan, Australia or countries in South East Asia.
- #8 Low Cost Carrier:A single Passenger class A single type of airplane reducing training and service cost No frills such as free food/drinks, lounges etc.Emphasis on direct sale of ticket through Internet avoiding fee and commission paid to travel agents.Employees working in multiple rolesUnbundling of ancillary charges to make the Headline fare lowerRegional AirlinesRegional airlines commonly called commuter airlines or feeder airlines, when they provide service to smaller communities that do not generate sufficient passengers to support service with larger aircraft, are passenger airlines that provides "short haulaircraft" service to smaller communities, frequently connecting to larger cities, and is generally intended to feed a larger airline with larger aircraft. They are also used to increase the frequency of service to some destinations that are also served by mainline aircraft.Charter AirlinesA charter airline, also sometimes referred to as an air taxi, operates aircraft on a charter basis, that is flights that take place outside normal schedules, by a hiring arrangement with a particular customer.Cargo AirlinesCargo airlines (or airfreight carriers, and derivatives of these names) are airlines dedicated to the transport of cargo. Some cargo airlines are divisions or subsidiaries of larger passenger airlines.