Jet Airways - Free Essay Example

Sample details Pages: 4 Words: 1247 Downloads: 3 Date added: 2017/09/13 Category Advertising Essay Did you like this example? Jet Airways (India) Ltd. is an airline based inMumbai,India, operating domestic and international services. It operates over 355 daily flights to 43 destinations across the country and 15 overseas. Its main base is Chhatrapati Shivaji International Airportin  Mumbai. Jet Airways other major hubs are located at  Indira Gandhi International Airport,Delhi,Anna InternationalAirport,  Chennai,  NetajiSubhashChandraBose InternationalAirport,  Kolkata,  BangaloreInternationalAirport,  Bangalore, and  BrusselsAirport,  Brussels. According to March 2007 available figures, its share of Indias domestic aviation market increased to over 43% (up from less than 27% a few months prior to March 2007), and, as of 2007, is greater than any other Indian domestic operators market share. Jet Airways was voted as the best airline in  South Asia  and  Central Asia  region bySkytrax  in 2007. HISTORYJet Airways was incorporated as an air taxi operator on  1 April 1992. Don’t waste time! Our writers will create an original "Jet Airways" essay for you Create order It started commercial airline operations on  5 May 1993  with a fleet of 4  Boeing 737-300  aircraft. In January 1994 a change in the law enabled Jet Airways to apply for scheduled airline status, which was granted on4 January 1995. It began international operations to  Sri Lanka  in March 2004. Plans to acquire rival Air Sahara, announced in January 2006, after some rough patches deal got through. The airline is owned by Tailwinds (owned by Naresh Goyal) (80%) and public shares (20%) and has 10,017 employees (at March 2007). Naresh Goyal, who already owned Jetair (Private) Limited (which providedsales and marketing for foreign airlines in India) set up Jet Airways as a full-service scheduled airline that would give competition to state-ownedIndian Airlines. Indian Airlines had enjoyed a monopoly in the domestic market between 1953, when all major Indian air transport providers were nationalised under the Air Corporations Act (1953), and January 1994, when the Air Corporations Act was repealed, following which Jet Airways received scheduled airline status Jet Airways and Air Sahara were the only private airlines to survive the Indian business downturn of the early 1990s. In January 2006, Jet Airways announced that it would buy Air Sahara making it the biggest takeover in Indian aviation history. The resulting airline would have been the countrys largest but the deal fell through in June 2006. However, a modified deal went through in January 2007. Lower wages in India compared with the West are not the only explanation for Jet Airways relatively low cost base by international standards. The company has also been able to lower its costs by sweating its assets, i. e. getting the maximum utilisation out of its aircraft fleet by minimising turnaround times between flights, similar to the leading European/North American low-cost, no frills carriers. This has partly helped it to offset the high costs of the airport infrastructure as well as jet fuel in India, which are higher in India than the international average. Brand ownership Jet Airways does not own its brand. The brand is owned by Jetair Enterprises Ltd. a separate company substantially owned by Naresh Goyal, which licenses the brand to the airline in return for an annual payment. This arrangement is very similar to the terms governing the use of the easy brand by the easyJet Airline Company Limited (the name under which easyJet has been incorporated). Under the aforesaid arrangement, Sir Stelios Haji-Ioannou, the founder and largest individual shareholder of easyJet Airline Co. Ltd. has sole ownership of the easy brand and licenses it to that airline for a specified payment. This kind of arrangement is of vital importance should the concerned airlines become the subject of a hostile takeover bid because the bidders will not automatically acquire ownership of their takeover targets brand and without access to the brand the takeover target will be less valuable. The Air Sahara takeover Failed Takeover On January 2006 Jet Airways announced that it was to buy Air Sahara for $500 million in an all-cash deal. Everything, including Saharas assets and infrastructure, would belong to Jet Airways. This deal would have been the biggest in Indias aviation history and the resulting airline the countrys largest, had it gone through. Market reaction to the deal was mixed, with analysts suggesting that Jet Airways was paying too much for Sahara. The deadline for the deal to be completed was  June 21,2006. Jet Airways claimed that a final sticking point was the governments delay in approving Jet chairman  Naresh Goyals appointment to the Sahara board. Sahara countered that Jet Airways had engineered this impasse by delaying the request for such approval, as a way of extricating themselves from a deal they now regretted. Jet was said to be willing to go ahead with the deal only if the originally agreed price was lowered by 20-25% on the basis of Saharas mounting debts, an option which was firmly rejected by Sahara. Finally both sides confirmed that the deal was off. Following the failure of the deals, the companies have filed lawsuits seeking damages from each other. On  22 September 2006, the Bombay High Court allowed Jet Airways to withdrawR s. 1,500crore  deposited by it for acquiring rival Sahara. Jet will have the right to withdraw Rs. ,500 crore against bank guarantee of the same amount, Justice D K Deshmukh said in his order. Jet Airways was to receive the amount in the escrow account, while the interest would go to Sahara. However, the escrow account formalities will be decided by an arbitration tribunal. Arbitration was to begin on  9 October 2006. Successful buyout On April 12, 2007 Jet Airways agreed to buy out Sahara for 14. 5 billion Rupees ($340 million). Sahara will be renamed Je t Lite, and will be marketed between low-cost carriers and full service airlines. With the cquisition of Sahara, Jet Airways is set to refurbish the fleet and crew with new livery and uniform. The deal will give the airline a combined domestic market share of about 32%. Jets attempt to buy Sahara in 2006 collapsed, but the company has said the new deal has been reached amicably. Both airlines also plan to merge and restructure their international operations as well. Jet Airways, founded by London-based former travel agent Naresh Goyal, controls about 24. 5% of the Indian domestic aviation market Sahara, owned by reclusive businessman Subroto Roy, controls about 7%. Successful buyout On April 12, 2007 Jet Airways agreed to buy out Sahara for 14. 5 billion Rupees ($340 million). Sahara will be renamed Jet Lite, and will be marketed between low-cost carriers and full service airlines. With the acquisition of Sahara, Jet Airways is set to refurbish the fleet and crew with new livery and uniform. The deal will give the airline a combined domestic market share of about 32%. Jets attempt to buy Sahara in 2006 collapsed, but the company has said the new deal has been reached amicably. Both airlines also plan to merge and restructure their international operations as well. Jet Airways, founded by London-based former travel agent Naresh Goyal, controls about 24. 5% of the Indian domestic aviation market Sahara, owned by reclusive businessman Subroto Roy, controls about 7%. Awards Jet Airways wins  Double Honour at the 18th TTG (Travel Trade Gazette) Travel Awards 2007. While Jet Airways won the  Best Domestic Airline award for the fourth consecutive year and the fifth time in the past six years, the evening also saw the  Travel Entrepreneur of the Year  award conferred on Mr. Naresh Goyal, Chairman, Jet Airways. Genius of the Web Awards 2007  for the Best Airlines website. Jet Airways (INDIA) LTD. awarded  TOP HONORS at World Airline Entertainment Association (WAEA) AVION AWARDS  second year in a row. Jet Airways Chairman Mr. Naresh Goyal honoured with the  TATA AIG Lifetime Achievement Award in Sep. 2007. Jet Airways won the  SAP ACE 2007  Ã¢â‚¬â€œ Awards for Customer Excellence, in the Best Travel Transportation Sector Implementation Category. The  Freddie Award   Highest Honour For Jet Airways in May 2007