Rise and fall of Jet Airways
Rise and fall of Jet Airways. Jet Airways was one of the biggest airlines in Indian aviation. It was a customer friendly airline known for its excellent service. It operated an extensive domestic as well as International network with a diverse fleet.
The airline ceased operations on the 17th of April 2019 after being operational for 26 years. The airline ceased operations mainly due to financial issues resulting from increasing cost and stiff competition.
Beginning of Jet
The airline was found by Naresh Goyal, a travel agent turned entrepreneur in 1992. The airline initially started out as an air taxi operator. It entered an industry which was dominated by state owned Indian Airlines. Operations were stated with a fleet of B737-300.
It operated its first flight on 5th May 1993 with flight commencing from Mumbai to Ahmedabad as 9W321 using a B737-300 aircraft. The airline could not operate as a scheduled airline until 1995 when the status of a scheduled airline was given to Jet Airways.
Since then the airline was expanding both with its fleet as well as its network. The airline was a breath of fresh air in Indian aviation and it was the first airline in South Asia to induct a fleet of B737-800.
Why was the airline special ?
The airline was special to many flyers. Jet Airways was known for its excellent service. Both on ground as well as up in the air. The airline was focussed on customer care and service. The airline always looked for the best talent in every division. Industry insiders say its employees were the highest paid in the industry.
The airline was the first to launch a frequent flier program in Jet Privilege. It had India’s first and only personalised service that the airline offered to its Platinum and Gold members through its frequent flier program. Jet Airways was also focussed on the top end of the market in serving corporate clients.
Their aircraft was also relatively new with an average age of 10 years and had a mixed fleet to serve short-haul, medium-haul and long-haul destinations. It was the first and only airline in India to bring in Private suits in their B777-300ER aircraft which served long-haul destination such as America and Europe.
Destinations it served
Jet Airways had a well connected domestic and international network. The airline started its first international service in March 2004 connecting Chennai and Colombo. Following that the next year Jet Airways had leased 3xA340-300 aircraft from South African and had started Mumbai to London-Heathrow service which was doubled the next year in 2006.
Formation of its European presence
The airline was expanding its domestic as well as international network but had not yet tapped the American market to which there were are lot of Indian travellers. The airline set up a secondary hub at Brussels from where the airline would make a stop.
In 2007 the airline started a Chennai-Brussels-Toronto service. It had also partnered with Brussels Airlines to make connectivity for passengers travelling within Europe easier. The airline also launched flights to New-York JFK and Newark to compete with Gulf carriers who were leading by a long way in flying Indians abroad.
The airline flew to Brussels from Mumbai, Chennai, Delhi and Banglore. This combination did not work as it was faced by stiff competition by the gulf carriers. The airline did not have enough local traffic from Brussels to India. It eventually changed its European hub from Brussels to Amsterdam.
Partnership with Air France-KLM
To aid this the airline started new services from India connecting Bengaluru with Amsterdam and Chennai with Paris. This move was a little too late and the airline ceased operations just a couple of years later
Other destinations in Europe
Jet Airways had started flights connecting London-Heathrow with Mumbai, Delhi, Amritsar and Ahmedabad but suspended the latter two destinations due to poor load factor. Jet Airways had continued operating from Mumbai and Delhi to London.
The airline also started flying from Delhi to Milan in 2010 but scrapped the route two years later citing global and European economic slowdown. In 2018 the airline was confident of passenger traffic between Mumbai and Manchester and connected them using an A330.
The airline wanted to present itself as the global airline of India. Soon after it had launched Euopean services connecting India and America, the airline launched routes to the west coast of America connecting Mumbai with San Francisco with a stopover at Shanghai in 2008. The route did not perform well and the airline stopped its service citing global economic slowdown.
The airline was also well connected within Asia connecting both South East Asia as well as Middle East. Jet Airways connected India with the Gulf especially focusing on the migrant traffic from Kerala to the Middle East. Through its partnership with Etihad the airline established another secondary hub in Abu Dhabi.
The airline also had regular flights to Singapore, Hong Kong, Bangkok and briefly served Kuala Lumpur. Jet Airways used its B777 and A330 wide bodied aircraft on some flights to Singapore and Hong Kong.
Jet Airways had a huge chuck of the market share before the rise of low cost carriers. During the times before ceasing operations the airline had a market share of around 15%.
The airline had its primary hub at Mumbai and Delhi. Its secondary hubs were based at Chennai, Bengaluru and Kolkata. Jet Airways mainly operated B737 domestic sectors and its fleet of ATR aircraft was used for regional services.
Merger, Acquisitions and Etihad
Purchase of Air Sahara and birth of JetLite and JetKonnect
Jet Airways had acquired Air Sahara in 2007 in a bid to reposition itself at the leading airline due to the emergence of full service carrier Kingfisher Airlines and low cost airlines such as IndiGo and SpiceJet. The airline acquired Air Sahara for Rs.1450 crores.
The airline rebranded Air Sahara as Jet Lite. This move wasn’t feasible in the long term as the airline was trying to operate low cost flights with a business model of a full service carrier. Jet Airways initiated for a subsidary low cost airline as it was facing stiff competition from the rise of low cost airlines in India.
The airline launched another brand within itself called Jet Konnect which had also offered low cost services. In 2014 Jet Konnect and Jet Lite were set to be merged to form a low cost branch of the parent airline Jet Airways.
The airline was in a state of identity crisis as it was a full service airline operating two low cost subsidiaries on a full service airline business model. This brought in additional financial strain on the airline which incurred heavy losses.
In 2013 Jet Airways became the first beneficiary of the government policy change that allowed foreign airlines to invest in India. Etihad had bought a 24% stake in Jet Airways worth 2.058 crores. The two airlines combined will have a network of around 140 destinations.
The move at that time seemed to help Jet Airways with financing, strategic expertise and fuel import benefits in addition to capital injection by Etihad. The airline had also leased its A330 and B777 to Etihad to provide additional funds for it to operate on.
Etihad had also invested around $150 million in its frequent flier program of Jet Privilege. Partnership with Etihad would enable the airline to operate out of a hub at Abu Dhabi. It would also enable passengers using Jet Airways to have connectivity to America, Europe and Africa from the Gulf hub.
The airline ceased operations on 17th April 2019 due to non availability of funds to operate further. The airline was mounted with financial debts. At the time of ceasing operations the airline had around 10,000 crore debt piling on it.
The threat posed by the emergence of low cost carriers forced the airline to creating JetLite and Jet Konnect. It operated a low cost airline as well as a full service airline under the same banner of Jet Airways.
Due to surge in fuel prices and competition in the aviation industry, the airline was forced to lower its price on par with the rest of the competition. But the operating cost of the airline compared to other low cost airlines was very high.
The airline also had bank loans, unpaid salary for its employees, dues for its leasing firms and unpaid dues for IOC which prompted the firm to stop supplying fuel. This resulted in the airline ceasing operation as it could not continue without further funding.
The airline operated its last flight on 17th April flying from Amritsar to Mumbai as S23502. Jet Airways had employed around 22,000 staff out of which it had around 16,000 direct employees.
Where are its aircraft ?
Jet Airways had a mixed fleet of Airbus, Boeing and ATR aircraft. The airline had 124 aircraft during the time of closure. It had also placed an order for 150 B737-MAX8 aircraft which was then cancelled due to its financial problems. Most of its aircraft have been taken back by its lessors and are operated by other airlines.
In India Spicejet which already operates B737 aircraft has added Jet Airways planes to its fleet. The low cost airline has added 31 of Jet’s aircraft. On the operational side of things since SpiceJet operates the same variant it was easier for the airline to induct it into its fleet.
Vistara had added 9 of its Boeing jets out of which it currently has 7. Regional airline TruJet has also added a couple of ATR aircraft. Jet Airways also has 12 aircraft grounded which are parked at various Indian airports including one B777 in Amsterdam Schiphol.
Jet Airways was a favourite among many travellers especially due to its impeccable service and network it had domestically and internationally.It is hard to imagine the airline rise up from the ashes given the current trend and timeline since ceasing of operation.
Nevertheless Jet Airways will always be remembered for being one of the best airlines which literally brought the ‘joy of flying’ among travellers.
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