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Jet Airways Case Study

Essay by   •  February 3, 2016  •  Case Study  •  568 Words (3 Pages)  •  970 Views

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BACKGROUND

Jet Airways was founded by Naresh Goyal on 1st April 1992 and commenced operations on 5th May 1993. It is the second largest Indian airlines by market share. Jet Airways along with its subsidiary JetLite accounts for 20.8% of the Indian airline industry. As of April 2015, it operates in 73 destinations worldwide (51 Indian and 22 international). It has 13945 employees.

Jet Airways owns 116 aircrafts with an average fleet age of 5.19 years. It is one of the youngest aircraft fleets in the world. Its top shareholders are Naresh Goyal (51%), Etihad Airways (24%), Life Insurance Corporation of India (2%) and Parvest Equity India (1%).

Jet Airways acquired Sahara Airlines (JetLite) in 2007 and signed a strategic alliance with Etihad Airlines on November 2013.

KEY FACTS

Headquarters

Mumbai

Regional Involvement

Global

Core Category Involvement

Commercial Airline

Fleet Size

116

Passenger Load Factor

80.4%

Passengers Carried ('000)

4480

Total traffic revenue (million)

306 USD

Profit (Loss) before tax (million)

(36.2) USD

Operating Profit (million)

(36.2) USD

Operating Profit Margin

-11.8%

* Figures are for the Q1 FY2015 as quoted in the Jet Airways Financial Report.

MISSION

“Jet Airways will be the most preferred domestic airline in India. It will be the automatic first choice carrier for the travelling public and set standards, which other competing airlines will seek to match.

Jet Airways will achieve this pre-eminent position by offering a high quality of service and reliable, comfortable and efficient operations.

Jet Airways will be an airline which is going to upgrade the concept of domestic airline travel - be a world class domestic airline.

Jet Airways will achieve these objectives whilst simultaneously ensuring consistent profitability, achieving healthy, long-term returns for the investors and providing its employees with an environment for excellence and growth.”

COMPETITIVE POSITIONING

[pic 1]

Jet Airways has consistently performed better than industry standards in terms of Net Sales. It reported sales growth of 2.56% in 2014 while the industry sales declined by 19.4%. But in terms of domestic passenger traffic growth, Jet Airways reported a CAGR of 1.1% during FY11-14 vs. industry traffic CAGR of 4.2% during the same period. Also its market share has declined over the past three years. From a peak of 29.3% in 2012 to 23.9% in 2014 and further down to 20.8% in 2015

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