One of the most important airlines company based in India, Jet Airways, is the second-largest airline company and it is a leader in the domestic market. Worldwide, it flies to a total of 67 destinations and flies 400 flights on an average day. Along with international flights, they have also launched low-cost domestic flights called “Jet Konnect”, which is one of the successful strategies to beat market slowdown.
The market of Jet Airways is mainly based on Indian citizens and their primary focuses do not shift from the base. If we look closely, SBU is the department that plans on a special set of products and everything along with those products. In recent times, the addition of Jet Konnect adds to the earlier launch of the low-cost airplanes by the company, Jet Lite (Forsyth, 2010).
The addition is a way to confront the global economic meltdown and also the slowdown in the Indian aviation Industry. Initially, it was thought that the company will launch Konnect and that will help the company to divert more planes to the more profitable routes where there are more passengers. Though there are many discussions going on about the business aspect of the newly launched services, Jet is confident about the success of Jet Konnect (Forsyth, 2010).
The industry insiders say that there are certainly many threats to maintain the low-cost airlines and they even identified them. We will discuss them later in the discussion. In a complete analysis, Jet Airways is not an absolutely customer-friendly airline company, as many of the customers have numerous complaints about their services and other aspects, but still, they are a market leader in the field. If we look at the position of the airlines in the market we will see that Jet handles almost 29% of the Indian Aviation market (Seetaram, 2010).
How does the Organization Make its Money
One of the most important players in the Aviation Industry in India, jet Airways had made its main profit by focusing on the destinations between India. Though it has its foreign destinations too, India operations are the primary focus of the airlines. The international hub of Jet Airways is in Brussels Airport of Belgium and its national hubs are in “Mumbai and Delhi; Chennai, Bangalore, Kolkata and Pune” (Seetaram, 2010) are other quarters of the company. JetLite and Jet Konnect are the two subsidiaries of Jet Airways.
Jet Airways have a total of 92 aircraft. Below we are giving the names of types of aircraft:
- “Airbus A330-200
- ATR 72-500
- Boeing 787-8
- Boeing 737-700
- Boeing 737-900
- Boeing 737-800
- Boeing 777-900” (Seetaram, 2010).
The average age of the aircraft in Jet Airways is 5.4 years as mentioned in a recently released report. In total Jet Airways flies to 23 international places like, “South Africa, Hong Kong, Bangladesh, Sri Lanka, Malaysia, Thailand, Kuwait” (Forsyth, 2010) among other international destinations. It also flies to all the airports in India.
On other points, Jet Airways shares Frequent Flyer agreement with a total of twenty airlines like “American Airlines, Brussels Airlines, United Airlines, Austrian Airlines, Air France, Lufthansa, Qantas, Swiss International Airlines, and Turkish Airlines”, (Forsyth, 2010) among others. It also has a codeshare agreement with eleven airlines like “American Airlines, Brussels Airlines, Emirates, Qantas, Virgin Atlantic, and United Airlines” (Forsyth, 2010) among other airlines.
Jet Lite: Basically Jet Lite is the subsidiary of Jet Airways which connects the Metropolises of India. On a regular basis, it flies more than 100 flights daily. It is also one of the companies in India which provides helicopters for charter services and aerial photography in different fields of photography.
Jet Airways: Financial Data
The graph shows that the earnings of Jet Airways were stable in the years 2005 and 2006 but later in the year 2007 the prices started to fall down. That was when the global economic meltdown was starting to affect all the industries in the World. That has also affected Jet Airways too. After the steady growth in the initial years that was the first time when Jet Airways was in front of a huge economical crunch. And like all the airlines they had to improvise different steps to control the influx and also maintain profit to stay in the business (Forsyth, 2010).
Financial Measures: In the period of economical downfall all the airline companies had to invent some strategies and Jet Airways started low-cost airlines like Jet Lite and Jet Konnect. But the industry insiders were really undecided about the future of the Airline’s measures. The growing cost of airline fuel in the international market was one of the very important causes of concern in this case. And all the companies had to suffer this issue. Jet had to suffer that too.
To discuss the marketing strategies of Jet Airways we first have to look at the different classes of the Airways and it has got three separate classes like “Economy Class, Business Class and Premium Class” (Seetaram, 2010). There are different promotional activities of Jet Airways, like:
- Offering Free Tickets: Jet Airways offers a lot of free tickets in many cases. At the festivals and other occasions, they offer a huge number of free tickets. Also sometimes they offer free tickets on the purchase of tickets. This is one of the surprise packages and also a good promotional activity.
- Concession for Students: Every year large number of Indian students go out of the country for the purpose of study. This is one of the most unique marketing situations and Jet avails the opportunity like no other. They offer huge concessions on the ticket. Also, many students have to go out of the state to study in other states. They are also entitled to get this same kind of privilege from the company too.
- Jet surprises: Jet also presents the customers with free gifts and other offer coupons from their subsidiary companies. This is immensely popular among frequent fliers (Forsyth, 2010).
- Corporate Tie-ups: India is a growing economy and it is one of the most important places in the Corporate World. Many Multinational Companies are coming to get hold of the market of India and also to use the highly talented and skilled manpower of India. And many of them are frequently flying out of the country. The company has tie-ups with several Corporate giants and this also gives momentum to the business.
Human Resource Management
Recently there is a very big problem that is lurking with the HRM policies of Jet Airways. Many of the staff were grounded by the company and they have not shown any reason. This really had an adverse effect on the company as a recruiter-friendly organization. But the company has always mentioned a good Human Resource policy. Let’s look at the strategies of the company.
- Training: The staffs have to undergo rigorous training and evaluation process before they are included in the company. The evaluation process goes on throughout the career (Wensveen 2009).
- The management motivates all the workers to do better work and work for the betterment of the company, and they even work in very tight schedules too.
- The employee growth is really good in the company which makes Jet an automatic career choice for job seekers. And it is growing on a regular basis and for this, a lot of job opportunities get created every day in the company.
- The HR of the company Mr. Naresh Goyel is a great leader himself and so the employees are generally motivated to do good work.
- Another important aspect of the Human Resources of the company is that Jet is all about fine teamwork and this really helps the company in all the sectors in the business (Forsyth, 2010).
The company has a really effective Human Resource management plan, but the plan sure back fired in recent layoffs. The company has to rethink new strategies to bring the older reputation of the company back.
Operations Analysis: As with all the companies Jet also has different operational strategies, for different markets. In many recent aviation-based surveys it has been said that Jet is India’s most preferred brand of Airlines. But the company had suffered many challenges to get to this position. It first had to face a very competitive domestic market. After that, they also have to face international competition. To face these problems, they first looked into their infrastructure and up to dated it with a lot of new technological developments. Before 2004, the technical staff had to go to the exact locations to maintain the air crafts and that caused the company a huge money issue. That even resulted in frequent flight delays and customer dissatisfactions which all over affecting the business of the company. Moreover that the 24-hour operations based in some of the cities in India were becoming very troublesome for the company. They had to find out new strategies for the company (Gillen & Gados, 2008).
To solve the problem the company collaborated with a technological company and they installed a new type of software in their systems that will help the staffs to fix the problems more quickly and thus saving both money and time. The previous thick client environment of the company is holding them from many solutions. However, all the newly installed machines will do all the trouble shootings in very few seconds (Morrell, 2008).
Strength and Weakness: As with all the companies Jet also has its own strength and weaknesses:
Strength: The strength of Jet Airways lies in its people. All the staffs are really cooperative and the customer feels at home instantly. Other than that the company has tie-ups with a lot of international airlines and other corporate companies and thus they have a stronghold in the market in the Air transport business.
Weakness: The most important weakness of Jet is brand confusion. Jet Airways brought Air Sahara and sometimes their brand makes people confused with all the other airlines. The company should make more promotional activities for the brand to give it a more strong identity (Francis, 2007).
One of the major and effective means of identifying the strength and weaknesses of a project is Pestle analysis. For Jet, all the information needed for this analysis is presented here.
|Political||The political aspect in this context is very clear. The government of the country is backing the airline companies to flourish and there are occasional grants and funds for the new entries. The trading policies are also suitable. There are no chances of war so the business can be smooth. The government structure with its new economic policies of the open market is also helpful. However, there are threats of terrorism but actual incidents are very low.|
|Economic||The economic trends and situations are both favorable in this booming economy of India. Though the recent recession slowed down the airline business, it recovered quite well lately. It should be noted that taxation is very steep in the region but it should be noted that there are no specific weather issues and trade and market cycles are stable. Similarly, internal cash flow and finance are also stable.|
|Social||Customer attitude is mostly indifferent but the company is a low-cost airline; it often acts as a determinant for the customers. There are no serious issues relating to ethnicity, race or religion and the media and advertisement facilities make it possible to target customers. There is a good amount of upwardly mobile population with better living standards in India that instigates better business in future.|
|Technological||There is hardly any research and development trend in the Indian business scenario and it generally depends on companies from overseas for the purpose. Thus, as they generally buy technology from the west, it is a homogenous market in this context with the absence of research funding, intellectual property issues, patents and new discoveries.|
|Legal||The home market legislation is favorable for business and there is hope in future legislation. As it is the regulatory boards and bodies are very lenient however, there are employment laws and they are well enacted.|
|Environmental||The ecological aspect is still not an issue in the Indian aviation industry. However, there are environmental regulations but the operational bodies are quite lenient in this matter.|
In conclusion, it should be stated that the Political Economic Social and Technological Analysis is one of the most recent strategic management concepts of recent times. In the case of Jet Airlines, we can say that the decision of plying low-cost aircraft is one of the most sought-after decisions of the company and they will be really benefited from this move. This will be also considered as one of the very important financial moves of the company too. One of the critical success factors of Jet Airways is mentioned in the PESTLE analysis. With the low-cost air crafts, they have cashed on the middle economy group of the Indian population. Financially there are a lot of people in India who belong to this economic class and by serving to that class Jet has made sure that their earnings just get better (Byrne, 2007).
Porter’s 5 Forces Model
The competition within an industry for more revenues is ever going issue in every market. This has to be faced by all the companies and all of them have to make policies to stay afloat in the business. The same is applied here in the case of Jet Airways. They have also devised some plans and that is clear in all the discussions in the earlier paragraphs.
But the model has some other points like “bargaining power of the suppliers” (Francis, 2007) (in aviation industry suppliers like those who supply fuel or the people and companies who maintain the technologies and most importantly the aircraft are the suppliers), “the bargaining power of the customers” (Francis, 2007) (it has been discussed that the company is one of the most customer-friendly companies), “Threat of new entries” (Francis, 2007) (India is a huge market and many companies are eying to enter the Indian market, so all the companies, including Jet have to be very careful about the new competitors and all the new strategies they have to offer to get hold of the ever-changing market), and finally the threat of substitute products (public memory is short and if they are dissatisfied once they will turn away from the company, so all the companies have to satisfy the passengers. Jet Airways have to believe that there are no loyal customer bases and they will always have to satisfy their customers) (Weller, 2009).
Critical success factor in the industry
Open competition in the Indian aviation industry is comparatively new but it can well be stated that sustainability over a longer period of time is helpful for the critical success factor. The reason is simple. There are several companies entering the market without much market research and ability. Thus, if the company carries on with the fundamental strategy of low and economic service, it would sure to yield success.
Opportunities and threats
As per opportunities, it can be stated that being a player in a new market the potential of the company is huge but at the same time, it should be noted that there are threats of sustainability in the middle of economic slowdown or international issues. Likewise, there is a chance of foreign investors entering the market in the future and then it would be difficult for the company to sustain itself if not they are prepared for it.
The strategic position of the company
The company has to keep in mind all these strategies and then take on steps to improve their market and that can be termed as their future strategies.
For further business developments, the company has taken some strategies. Let’s discuss the strategies in the following segment.
- Making an interactive development cell: The Company will look forward to making an interactive customer feedback cell where the customers can share their ideas and also give suggestions to make the services more customers friendly. This will help the company in more than one way. Like it will work as a publicity stunt, and more and more people will know about the company and its other programs.
- Applying more technologies: The Company has to apply more cutting-edge technologies to improve its services. This will initially take a very big investment but it will surely help the company advance in many ways.
- Merging with other Companies: There are a lot of companies in India who are eager to do business with Jet Airways. The strategy team will have to find out all the companies and all the prospects and their offers and if the offers seem good for the company they must merge. This will demographically increase the business of the company in many ways.
- Keep an eye on Marketing: This is the age of advertising. The company has to be more attentive with its advertising campaigns and they must increase the intensity of the advertisements. The company must think of some popular movie icons as brand ambassadors and also can become sponsors of a popular football team. This will definitely increase public consciousness (Pitfield 2008).
Implementing the Strategies
The strategies discussed in the earlier part of the discussion need a strong implementation process. The processes have to be really very result-oriented and so the company has to make out special teams for the processes. It will need a lot of new manpower and also they will have to be trained.
In other words, we can say that to be a leader in the aviation industry in India, the company has to understand India more than anything. The current Indian economical scenario is changing in a rapid way and more and more people are boarding planes now a day. This is one of the very good signs for the industry. Also, the economical reports are suggesting that the company is slowly getting out from the economical downfall. This is the right time to implement the strategies and get a much tighter grip on the market. One of the very important points of the company is that the company has international flights too and this is really helpful as many of the Indian companies lack in this aspect. Jet must try to increase their International flights and also look forward to other prospective destinations both internationally and domestically. In the case of domestic destinations, they can increase the frequency of flights in those places (O’Connell, 2006).
Jet Airways is one of the most popular brands of the Indian economy. Not only they are a leader in the aviation market they also play a large part in the stock market too. The basic components of Jet Airways are really better than many companies and they can surely give competition to a number of international airlines on the questions of service and maintenance.
In the final analysis, we can say that in near future, if all the strategies are properly implemented, the company can be a leader in Indian Aviation Market. This will be one of the biggest achievements of the company. The company now needs to focus on the setbacks they have suffered from the recent cut-off controversies and look forward to a better future. They have created their position in the market and it is solid in many ways, and now it’s the time to move on to become the Numero Uno in the aviation market. Industry insiders believe that they have the potential to become the best in the Indian market.
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