PRESENTATION ON JET AIRWAYS

Description
PRESENTATION ON JET AIRWAYS
PRODUCTS
INDIAN AVIATION INDUSTRY

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454 airports and airstrips (includes Operational, Non Operational, Abandoned and Disused Airports)
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127 are owned & operated by AAI
? 16 - international, 7 custom airports, 28 civil enclaves

Scheduled domestic air services - available from 82 airports

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May 2007- May 2008
25.5 million domestic & 22.4 million international passengers ? 20% growth – highest in the world
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Growth Rate Projections (for next 5 yrs)
15% p.a (Passenger Traffic) ? 11.4% p.a (Cargo Traffic)
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1911

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1932 1938
1946 1948 1953

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First commercial flight Airmails from Allahabad to Naini(10 km) The Aviation Department of Tata Sons Ltd. Established Tata Airlines (successor to aviation division of Tata Sons) Tata Air Lines converted into a public Company and renamed Air India Limited Air India International incorporated Nationalization of Aircraft Industry
Air India (serving the international sectors) ? Indian Airlines (serving domestic sectors) ? Deccan Airways, Airways India, Bharat Airways, Himalayan Aviation, Kalinga Airlines, Indian National Airways and Air Services of India
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1986

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Private Sector Players permitted as Air taxi operators
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Players including Jet, Air Sahara, NEPC, East West, Modiluft,etc started service

1990 1994 2003 2007 2008

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Open Sky Policy Private Carriers permitted to operate scheduled services Entry of low-cost carriers Merger of Indian Airlines into Air India Acquisition of Air Sahara by Jet Airways Kingfisher acquired 49% stake in Deccan Aviation

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Ministry of Civil Aviation
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Responsible for the formulation of policy, development and regulation of Civil Aviation. Its functions also extend to overseeing airport facilities, air traffic services and carriage of passengers and goods by air

Other Attached/Autonomous Organizations:
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Directorate General of Civil Aviation (DGCA)
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Promote safe and efficient Air Transportation through regulation and proactive safety oversight system

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Bureau of Civil Aviation Security (BCAS)
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Regulatory authority for civil aviation security in India

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Airport Authority of India (AAI)
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Accelerate the integrated development, expansion and modernization of the operational, terminal and cargo facilities at the airports

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Open Sky Policy FDI ? Airports
? 100% for green field operations ? 74% for existing airports - 100% with special permissions

? 100% tax exemptions for 10 yrs.

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Airlines
? 49% in domestic airlines - 100% for NRI’s

? 74% in cargo & non-scheduled airlines

Indian Aviation

Full Service Airlines

Low Cost Airlines

Regional Airlines

Charter Airlines Club One Air, Deccan Aviation etc.

Cargo Airlines Blue Dart, Aryan Cargo Express etc.

Air India,

Air Deccan,

Emric Air,

Jet Airways etc.

SpiceJet etc.

Air Dravida etc.

100 90 80 70 60 50 40

1 5 14

3 5 6 11

4 5 8

1 6 4 8 11

3 6 6 4 Others Indigo 28 GoAir SpiceJet Kingfisher 22 Air Deccan Air Sahara Indian

14 12 37 10

17

28

23

8

22 30 20 10 0 43 35 36 31

Jet Airways 23

Mar'05

Oct'05

Feb'06

Mar'07

Post Consolidation

In Post Consolidation Jet includes Air Sahara & Kingfisher includes Air Deccan
? Market Share is based on their Capacity Source: B&K Securities

High

Jet Airways

Kingfisher

Indian Airlines

Full Service

Air Deccan SpiceJet Go Air Indigo

Low Low Price High

Source : http://www.foolonahill.com/mbaaviation.html

Source : http://www.foolonahill.com/mbaaviation.html

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Founded in 1993, Chairman - Mr.Naresh Goyal HQ in Mumbai
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Country’s second largest international airline Largest domestic airline - 31%

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Primary base - Mumbai's Chaatrapathi Shivaji Airport Secondary hubs - Bangalore, Brussels, Chennai, Delhi, Hyderabad, Kolkata and Pune. April,2007 - Acquired Air Sahara - JetLite Now JetLite integrated into Jet Airways

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Annual Revenues - 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) - All Other Domestic Players showed loss(2006-07)

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Operational Parameters
Number of departure Available Seat Kilometers (ASKMs) Million Revenue Passenger Kilometers (RPKMs) Million

2007-08
126,676 24,447 16,914

2006-07
119,369 17,698 12,307

Passenger Load Factor %
Revenue Passengers (Numbers) Average Fleet Size

69.2%
11,428,910 66.3

69.5%
10,726,874 56.1

Total Operating Revenue 2007-08
1.5 7.1 6.8 Passenger Revenues

0.2

Revenues from Excess Baggage & Courier
Revenues from Cargo Other Revenues 84.4

Total Expenditure 2007-08
Fuel Selling & Distribution 33 Payroll Interest

Non-Operating Revenues

26

Total Operating Revenue 2007-08

6
8 5 10 12

Depreciation Aircraft Lease Rentals Other Operating Expenses

34.5

International Operations Domestic Operations

65.5

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Primary Segments (Geographic) - Domestic & International

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Customer Segments
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First class, Premiere(Business) class & Economy class

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Target Segments
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Premiere(Business) class Business travelers, contribute 48% of passengers & 66% of revenues, ready to pay higher prices, last time booking, don’t like transit Economy class Leisure travelers, prefer low cost airlines, ready for transit if there is cost advantage, large % of passengers

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Seat Allocation – Yield Management Technique Positioning – High value for High price
Unique Selling Price – Customer relationship and Punctuality

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Flight Class

11.4

Economy

Business

88.6

Air craft

No. First

Seats per flight Premiere Economy

Airbus 330-200 ATR 72-500

11 11

-

30 -

190 62

Boeing 737-400
Boeing 737-700 Boeing 737-800 Boeing 737-900

04
13 33 02

-

24
16 24 28

112
96 120 132

Boeing 777-300ER
Total

10
84

08

30

274

Information

Payment

Consultation

Billing

Core Transport

Order Taking

Exceptions

Hospitality

Safe Keeping

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Information

- Reg. the org., flight schedules, ticket fares, promotion schemes etc.
? Through website, call service, sms, employees etc.

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Consultation - Reg. the choices of class, routes to a destination & special menus for frequent fliers Order taking - Booking - through phones, fax and internet - Ticket Office, Call Centres, Company Website & Agents Hospitality - Most important differentiating factor (from ticket booking to post flight help) Safe keeping - Luggage & Children Exceptions - Special requests reg. meal preferences, special amenities for elderly people or children, medical needs etc. - Charges split, E-mail bills etc. - Credit card, Travellers cheque, Special payment privileges for frequent fliers

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Billing Payment

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Ticket Booking - FY'07
8 10 27 Online Direct Online Travel Agents Travel Agents Call Centre 40 15 Airline Ticket Office

Ticket Booking - FY'08
8 10 30 Online Direct Online Travel Agents Travel Agents Call Centre 32 Airline Ticket Office

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On Ground Services
Check in options - Airport check-in, Tele Check-in, Web Check-in, Kiosk Check-in, SMS Check-in, Check-in while walk-in, One Time Check-in on Return Journey, Through Check-in ? Airport Lounges ? Coach Services
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In-flight Services
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Classes of Service - First class, Premiere class & Economy class Convenience & Safety -Towels, Pillows & Blankets, Reading material, First Aid, Smoke detectors, Bassinets, Child Care, life jackets & seat cushion Cuisines Entertainment - Jetscreen – Movies, TV programmes, Games, Music, In-flight communicator, Online magazines etc. JetWings (in-flight magazine), JetBoutique (in-flight shopping catalogue)

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Special Services
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Infant and child care, wheel chair assistance, expectant mothers,
unaccompanied minors, medical emergencies, travelling with animals & carriage of stretchers

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JetMobile
JetKids JetEscapes Cargo

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Membership tiers – Blue, Blue Plus, Silver, Gold & Platinum
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Personalized web access JP Miles - 13 quarters validity Bonus JPMiles on e-Services Additional baggage allowance Guaranteed reservations up to 24 hrs. prior to departure Waiver on cancellation fees Membership Tier Bonus

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Earning & Redeeming JP Miles
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Eg: Chennai to Thiruvananthapuram (Earn Mile-383 & Redeem Mile-6894)

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Airline Partners - Air France, American Airlines, ANA, Austrian Airlines, Brussels Airlines, Cathay Pacific, Dragonair, Etihad Airways, Gulf Air, JetLite, KLM, Lufthansa, Northwest Airlines , Qantas, South African Airways, SWISS, United Airlines and Virgin Atlantic.

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Economy & Club Premiere Fare Discounted fare for senior citizens & defense personnel Advance Passenger Excursion/ APEX Fares One Fare Night Saver Fares Check Fares US Dollar Fares & Visit India Fares

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Place of Service - Aircraft Various Destinations

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Offers
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Companion Free Offer, One Fare, Concessional fares, JetPrivilege Offers, Jet Airways Citibank Credit Cards, Corporate Deal Offers, International Specials, Camp Rock contest, Festival specials, Student specials, Surprises etc.

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Advertising and Branding
Hoardings ? Brand Ambassadors ? Sponsorships ? Event Organization
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Employees
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Pilot, Cabin Attendants, Engineers, Customer Service Agents, Securities, Marketing, Sales & Reservation employees

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Customers

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Airline Partners - Air France, American Airlines, ANA, Austrian Airlines,
Brussels Airlines, Cathay Pacific, Dragonair, Etihad Airways, Gulf Air, JetLite, KLM, Lufthansa, Northwest Airlines , Qantas, South African Airways, SWISS, United Airlines and Virgin Atlantic. Code Share Partners - Air Canada, All Nippon Airways, American Airways, Brussels Airlines, Etihad Airways and Qantas Co-Brand Cards - CitiBank Conversion Partners - BarclayCard, CitiBank, Deutsche Bank AG, HDFC Bank, HSBC, ICICI Bank, SBI Card & Tata Cards Car Rental Partners - Avis, Hertz Hotel Partners - Global Hotel Alliance, Hilton Family Hotels, Hyatt Hotels & Resorts, InterContinental Hotel Groups, ITC etc. Lifestyle Partners - Globus and Golf Fee Card International Publishing Partners - Fortune, The Economist and TIME Retail Partners - Ferns n Petals Telecommunication - Matrix Cellular Services

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International market - British Airways & South West Airlines
Domestic market - King fisher, Indian Airlines, GoAir, Spicejet & Indigo

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People Processing
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People physically enter the service system to receive the service. Aircraft is the service factory where service is delivered.

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Possession Processing
Cargo ? Luggage & Courier
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Servicescape
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Servicescape usage - Interpersonal Complexity of Servicescape - Elaborate

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Flight Offices - Org. & Ticket Booking Agents Virtual Servicescape

Source : http://www.foolonahill.com/mbaaviation.html

Source : http://www.foolonahill.com/mbaaviation.html

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Check Fares Automated Rostering System Planning and Scheduling Systems Code Sharing Outsourcing ramp handling, passenger handling, ticket checking, cargo and loading and unloading in Delhi and Mumbai Automation to drive efficiency and improve response time Faster page and application download times for its site

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Magic Box
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Fund raising inside the flight for disaster relief, education & healthcare for poor and programmes to prevent exploitation of women

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Flights of Fantasy
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Underprivileged children and children with special needs are taken on specially organized flights (on Children’s Day)

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Political Issue
License issue for international operation ? Infrastructural constraint ? ATF price policy
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Social Effects
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Sound Pollution Plane hijacking 9/11 Incident

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Economic Effects
Rising income level ? Reduced fare but yet not enough
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Technology Effects
Modernization of aircrafts ? Modern technology like CAT3 and ILS
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Strengths
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Market driver Experience exceeding 14 year Only private airline with international operation Market leader Largest fleet size

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Opportunities
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Untapped air cargo market Scope in international service and tourism

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Weaknesses
Loosing domestic market share ? Old fleet with average age around 4.79 years ? Scope for improvement in in-flight service ? Weak brand promotion
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Threats
Strong competitors ? Fuel price hike ? Overseas market competition
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