RECONFIGURING JET AIRWAYS Source: BUSINESSWORLD- 31 ST AUGUST2009Author: Anjuli Bhargava The article clearly underlines the strategy being

adopted by Jet Airways at different phases, itthrows light on the problems being faced by the company along with the mistakes it hasc o m m i t t e d i n a c o m p e t i t i v e m a r k e t l i k e t h a t o f I n d i a , l i k e p r o d u c t c a n n i b a l i z a t i o n b y launching Jet Konnect services, ultimately leading to loss of own market share. However thea r t i c l e matures towards the end by highlighting the steps taken by Jet t o e n c o u n t e r t h e problems being faced, by means of improvement plans and downsizing spanning across theOrganization amongst the other steps taken. How it all started? Although aviation is not the most profitable of businesses to be in globally, Jet Airways - oneof the first private players to enter the Indian market - did manage to make profits for manyyears. But, with the changing customer preferences began an era of many low-fare airlineswhich was registered through a dramatic growth in the number of air travellers - 30-40 per cent per annum. Thus, by virtue of this, Jet committed its first big mistake by buying out theloss-making Sahara, which according to analyst was way too expensive.W i t h the domestic market slowly slipping out of its grasp, Jet A i r w a y s d e c i d e d t o g o international and set a very aggressive pace for international expansion - partly to counter thedomestic woes and to get the first mover advantage. However, in September 2 008, with theglobal recession hitting hard, Jet added 18 wide-bodies in one year but had to lease them out, but it was Jet's international foray that helped it withstand the carnage in the domestic market.. Classic Example of Product Cannibalization In order to cater the rising market of price-sensitive fliers, Jet Airways went on to launch an e w s u b - b r a n d a l t o g e t h e r k n o w n a s J e t K o n n e c t . T h i s b r a n d w a s e x c l u s i v e l y t a r g e t e d towards leisure travellers and avoiding prime time departures which became a trend i n theaviation industry. Jet Konnect was positioned between full-service Jet and Jetlite which wasalready catering to price-sensitive fliers by means of no frill airlines; thus leading to inter -linkages within the Company in terms of capturing higher market share. Jet Konnect by nomeans enjoys monopoly in its product category asit is facing strong competition with theentry of younger players such as IndiGo and SpiceJet which have offered people credible,efficient and on-time service along with fair prices.

Cost Cutting Measures Jet Airways realized that only way to survive in the not-so-profitable Indian Aviation Industrywas through means of extensive cost -cutting spanning across the Organization Structure. A fresh improvement plan of $600 million was developed on three fronts wastage reduction,network restructuring and cost saving leading to cash conservation; using various mediums like procurement of various services at a slashed cost. This was well complimented by meansof downsizing leading to staff-cut by about 2,000 employees. Survival of Jet Airways A huge question mark remains over Jet's new strategy, as its reputation in the past few monthsh a s t a k e n a h i t , o w i n g t o t h e f a c t t h a t b r a n d p e r c e p t i o n a m o n g s t t h e l o y a l c u s t o m e r s h a s experienced a rapid downward shift. Apart from this, labour unrest is another important factor t h a t has been troubling Jet Airways leading to mass strikes, l e a v i n g J e t A i r w a y s t o t a l l y handicapped and moreover leading to loss of revenue. To address all such existing problems,Jet Airways needs to reengineer its business model in order to cater to the new tastes and preferences of the evolving and innovating market. Conclusion The article takes the reader through the strategies which have been adopted by Jet Airways,w i t h a c r i s p o v e r v i e w o n t h e p r o d u c t c a t e g o r i e s a n d t h e p r o b l e m s b e i n g f a c e d b y t h e m respectively. However, the article has not focused on the competitors as such. Competition inIndian aviation industry has moved to new heights, thus the need to encapsulate competitionis felt. Also the figures quoted by the author are not sufficient enough to analyse the operatingefficiency of Jet Airways, the data for atleast previous 5 years is deemed essential.The problems have been clearly identified by the author, however assessment of the currentsituation is lacking by means of defined strategies being perused by Jet Airways to tackle thenew challenges on board. The article chapters could have been given better headings whichcould depict the readers about the content of that particu lar chapter; the same have beenincorporated in this.Overall, the article is quite informative in nature and contains elements of quality research of the industry and the company in picture. NISHITA GOEL140/09 , TRM-IIEEB