Case Study on Jet Airways

8/6/2019 Case Study on Jet Airways

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JET AIRWAYS JET AIRWAYS About Jet Airways : About Jet Airways :

Jet Airways (India) Private Limited is India's leading Jet Airways (India) Private Limited is India's leading private airline.private airline.

It boasts a market share of about 29 percent.It boasts a market share of about 29 percent. Jet operates a relatively young fleet of Boeing 737 jets and Jet operates a relatively young fleet of Boeing 737 jets and

ATR72 turboprops. ATR72 turboprops.It carries about seven million passengers a year.It carries about seven million passengers a year.Its reputation for punctuality and outstanding serviceIts reputation for punctuality and outstanding service

attracts a largeattracts a large


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L

ight onL

ight on NareshNaresh GoyalGoyal: Founder and: Founder andCEOCEON aresh Goyal is the founder andN aresh Goyal is the founder and

Chairman of Jet Airways, India's largestChairman of Jet Airways, India's largestdomesticdomesticairline.airline.

In May 1974, N aresh Goyal founded JetIn May 1974, N aresh Goyal founded Jetair (Private) Limited to look after Sales andair (Private) Limited to look after Sales and

Marketing operations of foreign airlines inMarketing operations of foreign airlines inIndia.India.N aresh Goyal took advantage of OpenN aresh Goyal took advantage of Open

Skies Policy of the Government of IndiaSkies Policy of the Government of Indiaand set up Jet Airwaysand set up Jet Airways


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K ey Dates:K ey Dates:1993:1993: Jet Airways begins domestic operations flying Jet Airways begins domestic operations flyingBoeing 737 jets.Boeing 737 jets.1997:1997: K uwait Airways and Gulf Air sell their stakes inK uwait Airways and Gulf Air sell their stakes in

Jet Airways. Jet Airways.1999:1999: A regional network is launched with turboprop A regional network is launched with turbopropaircraft.aircraft.2004:2004: The first international services are started. The first international services are started.20072007: Acquired Air Sahara and re launched it as jet: Acquired Air Sahara and re launched it as jetlite.lite.


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Principal Competitors:Principal Competitors:International Market :International Market :

-- British AirwaysBritish Airways-- South West AirlinesSouth West AirlinesDomestic Market :Domestic Market :

-- King FisherKing Fisher

-- Indian AirlinesIndian Airlines-- Go AirGo Air-- Spice jetSpice jet-- IndigoIndigo


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Due to which two senior pilot were fired .Due to which two senior pilot were fired .Captain Sam Thomas( Captain Sam Thomas(g.sg.s) )Captain DCaptain D BalaramanBalaraman..

OnOn Aug. 23 Aug. 23rdrd the Guild ( N AG) warned that they the Guild ( N AG) warned that they would go on strike from Sep. 7 would go on strike from Sep. 7 thth if both theif both the

pilots are not reinstated.pilots are not reinstated.


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Chief justice Swatanter Kumar and JusticeChief justice Swatanter Kumar and Justice AM Khanwilkar issued a AM Khanwilkar issued a noticenotice againstagainstN AG seaking a reply in 2 weeks.N AG seaking a reply in 2 weeks.Later 2 more pilots were sackedLater 2 more pilots were sackedCivil aviation secretory Civil aviation secretory MadhavanMadhavanN ambiarN ambiar said govt. has nothing to dosaid govt. has nothing to dobetween both, but they has taken seriousbetween both, but they has taken serious

view of the inconvenience to public and view of the inconvenience to public andaskedasked DGCADGCA to take action.to take action.CEOCEO told he is open for talk but he toldtold he is open for talk but he toldcompany does not recognize N AG. andcompany does not recognize N AG. andpilots are behaving like terrorists.pilots are behaving like terrorists.


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Fortunately Fortunately after loss of after loss of crorescrores

and goodwill on 13and goodwill on 13thth

sep. strikesep. strikeended after 5 days whenended after 5 days when N areshN areshGoyalGoyal reinstated the sackedreinstated the sackedpilots and paved the way forpilots and paved the way for

possible recognition of a pilotspossible recognition of a pilotsunion.union.

Back to work


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Strike: A HugeL

ossStrike: A HugeL

oss

From 8 to 13 September:From 8 to 13 September:

Jet Airways lost 200 crores in just five days. Jet Airways lost 200 crores in just five days.

Cancellation of 134 domestic and 32 internationalCancellation of 134 domestic and 32 international

FlightsFlights

Average passenger per day dropped from 23000/day to Average passenger per day dropped from 23000/day to14000/day.14000/day.


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Strike: A Huge L ossStrike: A Huge L oss

Jet has to Jet has to accommodate 80accommodate 80%% of theof thepassenger on the other carriers.passenger on the other carriers.

For the rest entire fare has been refunded.For the rest entire fare has been refunded.

Loss of goodwill is not measurable.Loss of goodwill is not measurable.


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Can Pilots Form A union?Can Pilots Form A union?

It is written in our Constitution that it is a fundamentalIt is written in our Constitution that it is a fundamentalright of every citizen to form groups or union.right of every citizen to form groups or union.

Under IDA pilots are classified as workmen.Under IDA pilots are classified as workmen.

Under WCA members of any company, organization orUnder WCA members of any company, organization orIndustry can form a trade union if they are more thenIndustry can form a trade union if they are more then100 people.100 people.


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IS IT STRIKE?IS IT STRIKE?


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IS PILOTSIS PILOTS ARE O

NSICK ARE O

NSICK LEAVE?LEAVE?


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OR IS ITOR IS ITSOMETHI

NGSOMETHI

NGELSE?ELSE?


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Actually it is a Actually it is astrike.strike.


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Illegal StrikeIllegal Strike

According to I N DUSTRIAL DISPUTE ACT: According to I N DUSTRIAL DISPUTE ACT:

Any strike without giving notice during Any strike without giving notice during conclusion processing is prohibited.conclusion processing is prohibited.Even if they have given a notice then also they Even if they have given a notice then also they have to wait for 14 days. Then only they can gohave to wait for 14 days. Then only they can goon strike.on strike.

After the conclusion on consolation proceeding After the conclusion on consolation proceeding they have to wait for 7 days before they can gothey have to wait for 7 days before they can go

on strike.on strike.


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Advantage of jet airways crisis for other Advantage of jet airways crisis for otherairlinesairlines

Jet Airways transferred as many as 60 percent of Jet Airways transferred as many as 60 percent of

the passengers booked on its flights to Air India,the passengers booked on its flights to Air India,the national carrier, and other airlines during thethe national carrier, and other airlines during thestrike.strike.Rival carriers began to charge fares at almostRival carriers began to charge fares at almost

double the usual rates after the strike hampereddouble the usual rates after the strike hampered Jet Airways operations. Jet Airways operations. A big competitor was out, therefore it was a big A big competitor was out, therefore it was a big advantage to other airlinesadvantage to other airlines


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Current SituationCurrent Situation

1.1. The standoff between the airline and its pilots ended The standoff between the airline and its pilots endedlate Saturday after the company agreed to reinstatelate Saturday after the company agreed to reinstate

four pilots who were fired for trying to form a pilotsfour pilots who were fired for trying to form a pilotsunion.union.

2.2. Jet airways has reduced its fares to 50%.With Jet airways has reduced its fares to 50%.Withdiscounts, the cost of air tickets dropped close to airdiscounts, the cost of air tickets dropped close to air--conditioned II tier Rajdhani Express fares.conditioned II tier Rajdhani Express fares.

3.3. Jet airways witnessed a 10 per cent switch from low Jet airways witnessed a 10 per cent switch from low--cost carriers to jet.cost carriers to jet.

4.4. The airline is operating on full schedule of services The airline is operating on full schedule of serviceson its domestic and international flights with all crew on its domestic and international flights with all crew

reporting for duty reporting for duty


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5. Jet offered a full refund to passengers whose flights5. Jet offered a full refund to passengers whose flights were canceled. were canceled.

The sacked pilots are rehired and a consultative group The sacked pilots are rehired and a consultative groupis being formed comprising representatives of theis being formed comprising representatives of thecompany and pilots to continue the process of company and pilots to continue the process of dialogue to resolve all their problems.dialogue to resolve all their problems.

Jet Airways suffered a loss of nearly US$8 million a Jet Airways suffered a loss of nearly US$8 million aday during the strike. and the number of passengersday during the strike. and the number of passengerscame down from 23,000 per day to 7,500.came down from 23,000 per day to 7,500.N o punitive action against any one who participatedN o punitive action against any one who participatedin the agitationin the agitation


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9.9. Shares of Jet Airways rose as much as 4.6Shares of Jet Airways rose as much as 4.6percent, the most in two weeks.percent, the most in two weeks.

10.10. Airline losses globally may total $9 billion this Airline losses globally may total $9 billion thisyear, according to the International Airyear, according to the International Air

Transport Association, almost double the Transport Association, almost double thegroups previous forecast.groups previous forecast.


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THANK YOU

Kirti Y. TiwariRoll No. 19

PG MBA Sem.- IV

Documents

Case Study on Jet Airways