Jet Airways: Developing marketing strategy and profitable model

Abstract

After 80 years of its inception, Indian airline industry which started in year 1932 has come a long way facing several highs and lows, at times booming and sometimes bleeding industry. Pre liberalization was the era of monopoly by the biggest player i.e. Air India. However the aviation industry saw a drastic change in the industry after post liberalization in year 1991. Whole new players entered the industry and started fulfilling the unmet demand by Air India. This was the era when Indian aviation industry was seen as rising star. However, with increased competition, inefficient operations and government taxes took away some of the shine from the industry. This consolidated the market and only some of the players like Jet Airways and Air Sahara survived. Then entered the low cost carriers and once again they changed the face of the aviation industry with their price positioning. With the entry of low cost carrier like SpiceJet and Indigo, Jet Airways felt the heat in the domestic market and thus launched JetLite. However, JetLite couldn’t perform well because of low revenue and high expenses. In year 2008, when Indian economy was at slowdown, Jet launched another low cost brand named Jet Konnect. Though this move increased Jet’s presence in the domestic market but the rising costs and debts kept the profit away. Moreover, with so many brands, Jet was unable to focus on the market which was already confused due to so many offerings from the same company resulting in cannibalization and brand fragmentation. It’s high time that Jet starts looking into these issues before it also meets the Kingfisher’s fate. Through our study, we have tried to study the underlying causes of the issues currently faced by Jet Airways and tried to find solution for those issues which will not only help Jet to regain its brand positioning but also make it profitable in long run. We have looked at the operations of low cost carriers like Indigo and SpiceJet and then compared it with Jet’s operation to find the issues with Jet and possible solution to it. Losses due to increased fuel price can be overcome by hedging the oil prices whereas increasing the operational efficiency like, fast turnaround and on time performance will go a long way in brand building. Similarly, we suggest that JetLite and Jet Konnect should go through brand fusion to be branded a separate low cost airline with no association with brand Jet. This is the time when Jet has to adopt the lean strategy by reducing its costs and expenses with clear brand positioning if it has to survive.