SUBMITTED BY:-
GUIDED BY:- PARITOSH KUMAR
CHARU LATA MA’AM BBA(AVIATION)
AVIATION FACULTY ENROL NO:- 140118022
DOWNFALL OF JET AIRWAYS:-
• BEGINNING OF AIRLINES
• MID STAGE OF AIRLINES
• DOWNFALL OF AIRLINES
• AFTERMATH
BEGINNING OF AIRLINES:-
• FOUNDED ON 1st APRIL,1992 BY NARESH GOYAL & HIS CHILDREN.(NIVAAN
GOYAL & NAMRATA GOYAL)
• COMMENCED ALL OPERATIONS FROM 5th MAY,1993.
• FIRST OPERATING FLIGHT 9W321 FROM BOMBAY TO AHMEDABAD.
• HEADQUARTERS IS BASED ON MUMBAI,MAHARASHTRA.
• IATA- 9W
• ICAO- JAI
CONTD…..
• FIRST FINANCIAL YEAR, JET AIRWAYS SERVED 12 DESTINATIONS IN
INDIA AND 663,000 PASSENGERS AND HAD A 6.6% MARKET SHARE.
• INCLUDED FOUR BOEING 737-300 AIRCRAFT IN FIRST FLEET, LEASED
FROM ANSETT WORLDWIDE.
• GRANTED A SCHEDULE AIRLINE STATUS ON 14th JANUARY,1995.
• BY 1996-97, THE AIRLINE CARRIED 2.4 MILLION PASSENGERS AND
HAD A MARKETSHARE OF 20% & INCREASED HIS FLEET FROM 4 TO
12 BOEING 737 AIRCRAFT.
MID STAGE OF AIRLINES:-
• THE AIRLINE LAUNCHED ITS FIRST INTERNATIONAL FLIGHT IN
MARCH 2004 FROM CHENNAI TO COLOMBOO.
• BECAME PUBLIC COMPANY ON 28th DECEMBER,2004 AND
LISTED ON THE BOMBAY STOCK EXCHANGE.
• IN JANUARY 2005, MCA GRANTED RIGHTS TO JET AIRWAYS TO
OPERATE SERVICES TO LONDON HEATHROW.
• ON 12 APRIL 2007, JET AIRWAYS ACQUIRE AIR SAHARA FOR
14.5BILLION(200 MILLION) & RENAMED AS JETLITE.
CONTD:-
• IN OCTOBER 2008, JET AIRWAYS LAID OFF 1900 OF ITS
EMPLOYEES,WHO WERE LATER RE-INSTATED DUE TO INTERVENTION
FROM THE MCA.
• ON 8th MAY 2009, JET AIRWAYS LAUNCHED ANOTHER LOW-COST
BRAND,JET KONNECT & INCLUDED BOEING 737 NEXT GENERTION
AND ATR-72 AIRCRAFTS IN FLEET FOR SHORT-HAUL ROUTES.
• BY THE END OF 2010, JET AIRWAYS BECAME THE LARGEST AIRLINE
IN INDIA WITH A PASSENGER MARKET SHARE OF 22.6%.
• OPERATES OVER 400 FLIGHTS DAILY TO 65 DESTINATIONS &
AGREEMENT WITH 133 INTERNATIONAL AIRLINES.
• ON 12th NOVEMBER 2013 JET AIRWAYS SOLD 24% STAKE OF AIRLINE
TO EITHAD FOR US$379MILLION.
PERFORMANCES & CHALLENGES:-
• ANNUAL REVENUE- 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)
• AMONG A COMPARISON OF 140 COUNTRIES,IT WAS SEEN THAT INDIAN
TICKET TAXES,FUEL TAXES AND AIRPORT CHARGES ARE 24 th HIGHEST.
• THE DOMESTIC CARRIERS IN INDIA REPORTED A COMBINED LOSS OF USD
1.6 BILLION FOR THE FINANCIAL YEAR 2012-13.
DOWNFALL OF JET AIRWAYS:-
• COMPETITION FROM LCCs.
• POOR FLEET ACQUISITION.
• POOR NETWORK PLANNING.
• CONFUSED PARTNERSHIP.
• REVOLVING DOOR MANAGEMENT
COMPETITION FROM LCCs:-
• 9W NEVER ANTICIPATED THE LEVEL OF COMPETITION THAT THEY WOULD
FACE FROM LCCs.
• THE FIRST WAVE OF INDIAN LCCs FIZZLED OUT AIR DECCAN THROUGH
ABSORPTION INTO KINGFISHER,ULTIMATELY CAUSING THE DOWNFALL OF
KINGFISHER AIRLINES.
• 9W NEVER UNDERSTAND THE INDIAN FLYER AND MUCH MORE DEPENDENT
ON CORPORATES PEOPLE.
• LASTLY EXPANSION OF LCCs ABROAD AFFECTED THEIR INTERNATIONAL
ROUTES WHICH WERE CONSIDERED TO BE THEIR PROTECTED MARKETS AS
9W WAS FSCs.
POOR FLEET ACQUISITION:-
• THE ACQUISITION OF WIDEBODY AIRCRAFT FOR A LONGER TIME
AFFECTED FINANCIALLY AS IT NEED LOTS OF MAINTAINANCE COSTS.
• ONBOARDING OF TOO MANY AIRBUS A330s AND BOEING 777-300ERs
IN THE LATE 2000s WITHOUT ANY PROPER NETWORK & VOLUMES TO
DEPLOY THESE.
• LEASING OUT THESE AIRCRAFTS ON A VERY SHORT MARGIN OF
PROFIT TO THIRD PARTIES SUCH AS THAI AIRWAYS & TURKISH
AIRLINES.
• IGNORING THE DELIEVERY OF DREAMLNERS( BOEING 787-9) INTO
THEIR FLEETS WAS ALSO CONSIDERED AS A MAJOR SETBACK.
POOR NETWORK PLANNING:-
• THE BAD NETWORK PLANNING OF VARIOUS ROUTES BY
THE MANAGEMENT ALSO LEADS TO HUGE LOSSES.
• TOTALLY FOCUSSED INTO THE INTERNATIONAL ROUTES
& WIDE BODY AIRCRAFTS.
• THE FAILURE OF ULTRA LONG HAUL ROUTES SUCH AS
BANGLADESH-SAN FRANCISCO DUE TO FLUCTUATION
OF OIL PRICES.
• TOTALLY IGNORED TO STRENGTHEN THE DOMESTIC
ROUTES & REGIONAL ASIAN AND MIDDLE EASTERN
NETWORKS.
• LASTLY THE MANAGEMENT HAD NO PLAN TO COMPETE
WITH THE LCCs BASED AIRLINES.
CONFUSED PARTNERSHIP & REVOLVING
DOOR MANAGEMENT:-
• THE FAILURE OF SEEKING ADMISSION TO STAR ALLIANCE BY
ELBOWING AIR INDIA OUT OF THE WAY.
• THE PARTNERSHIP WITH EITHIAD AIRWAYS HADN’T SUPPORTED
MUCH TO THEIR FINANCIAL POSITION AS AT THE SAME TIME FUEL
PRICES RISES GLOBALLY.
• THE JOINT VENTURE WITH AIR FRANCE- KLM FOR INDIA-US
MARKET HADN’T BENIFTTED MUCH DUE TO LIMITED CHUNK OF
MARKET.
• THE MULTITUDE OF LEADERSHIP CHANGES AT TOP LEVEL &
IGNORING THE EXPERTS ADVICE AND MORE IMPORTANTLY WRONG
INTERPRETATION BY NARESH GOYAL AND TAKING ALL MAJOR
DECISION BY HIMSELF.
OTHER SHORT TERM CAUSES:-
• HIGH FUEL COSTS AND HUGE TAXATION BY INDIAN GOVERNMENT.
• HIGH MAINTAINENCE COSTS OF AIRCRAFT AS JET AIRWAYS HAD OLD
FLEET WITH AVERAGE AGE AROUND 4.79 YEARS.
• HIGH PAYMENT OF SALARIES TO THE EMPLOYEES & EXPENSIVE SERVICES
TO THE CUSTOMERS IN LOW PRICE DESPITE OF STRUGGLING WITH
HUGE LOSSES AND DEBT.
• CONTROLLING THE ENTIRE MANAGEMENT INCLUDING THE ACCOUNT
STATEMENT i.e. CASH INFLOWS-OUTFLOWS BY NARESH GOYAL ITSELF.
• VARIOUS ALLEGATIONS ALSO STATE THAT NARESH GOYAL WAS
INTERESTED IN GENERATING HIS OWN REVENUE FROM LAST FEW YEARS.
CURRENT SITUATION:-
• THE AIRLINES NEED THE EMERGENGE FUNDING OF APPROX 1500
CRORES.
• AIRLINE WAS TEMPRORLY SHUT DOWN DUE TO LACK OF FUND &
LAST FLIGHT WAS FLOWN BETWEEN AMRITSAR TO MUMBAI ON
17th APRIL,2019.
• NARESH GOYAL STEPPED DOWN FROM CHAIRMAN POSITION &
HIS SHARE DECREASED TO 21% FROM 51% & SBI TAKE OVER
CONTROL.
• SBI IS LOOKING FOR POTENTIAL BIDDERS WHO COULD INVEST IN
THE AIRLINES.
• OVER 20 THOUSAND EMPLOYEES HAD BEEN AFFECTED & THEIR
SALARIES HAD NOT BEEN PAID FROM LAST 3-4 MONTHS.
AFTERMATH:-
• DECREASED THE FLEET SIZE FR0M 115 AIRCRAFTS TO APPROX
15 AIRCRAFTS.
• SPICEJET HAS LEASED APPROX 22 AIRCRAFTS FROM THE
FLEET OF JET AIRWAYS INCLUDING OTHER AIRLINES AIR
INDIA,VISTARA HAS ALSO SHOWN INTEREST.
• MAJOR SLOTS OF JET AIRWAYS HAS GIVEN TO SPICEJET.
• NO SIGNS OF ANY POTENTIAL BIDDERS.
SHOULD GOVT INTERVINE ?
WHY DGCA SUDDENLY CHANGED THE POLICY OF SLOT
ALLOCATION?
