By-

IIMA

Jet Airways

• Jet Airways was incorporated as an air taxi operator on 1 April 1992. It started Indian commercial airline operations on 5 May 1993 with a fleet of four leased Boeing 737-300 aircraft.

• It is India's third largest airline after Air India and Kingfisher Airlines.

• It operates over 400 daily flights to 65 destinations worldwide.

• Jet Airways also operates two low-cost airlines, namely JetLite (formerly Air Sahara) and Jet Airways Konnect.

Awards and Achievements • Jet Airways has been given a 3 Star rating by Skytrax.

• India’s Most Respected Company in the Travel and Food

Sector by Businessworld 2003.

• Best Domestic Airline award for the 1st consecutive year and

the 5th time in the past two years at the 18th TTG (Travel

Trade Gazette) Travel Awards 2007.

• Best Business Class & Best Economy Class at the Business

Traveller Awards.

• India's Popular Domestic Airline at the SATTE 2006 Awards.

Jet Airways and the Crisis

The pilot’s viewpoint: The pilots demanded setting up of NAG-National Aviators

Guild, a welfare society for the Indian pilots. The idea behind

this was not to fight with the management but to protect the

employees legal rights.

The Jet Airlines management sacked two senior pilots,because

of their role in formation of NAG this resulted in a strike by

several Jet Airways pilots by reporting sick and failing to turn

up for duty. (Around 500 pilots went on mass-sick leave.)

The stand off continued for five days with both the

management and pilots union refusing to stand down.

The Governments stand: The govt. took a neutral stand and was not keen to impose

ESMA (essential services maintenance act), against the pilots as the situation was not really a public issue.

It stated that flights of one airline cannot be viewed as essential services, since other airlines were operational.

The labour ministry stated that forming a union could not be a justifiable ground to sack pilots.

The aviation minister, Praful Patel requested jet to end the crisis as soon as possible so as to avoid any inconvenience to the passengers due to sudden reduction in flights.

Impact on the company: Financial impact-

Jet suffered a revenue loss of about 18 crores per day,

Hence the 5 day turmoil caused a loss of 90 crores.

The brand equity of jet took a hit as it suffered from two different employee related crisis in less than one year.

Consumers facing all the heat The end loser in the stand off between Jet management and the

pilot union are customers who are being forced to pay 3 to 4

times the money for a ticket by the other airlines.

As a result of the mis-management within the company even

the most loyal and regular “JET fliers” are having second

thoughts while booking tickets.

Corrective Action by JET: Jet reached a settlement on all issues by forming a

consultative committee of the mgmt. & pilots to look into the issues faced by the pilots.

It also took back the terminated pilots.

Jet also reduced domestic fares by 50% so as to win back customers and cover up the financial losses it had suffered during the crisis.

A repetition of the past:

2008 Layoff and Rollback

The present crisis reminds us of the previous jet airways crisis.

Given the global economic downturn, Jet Airways decided to layoff

1900 employees, mainly cabin crew & flight attendants who were

probationary employees.

The laid off staff protested and it got extensive media coverage

which shook up the company and the government.

On 16th October 2008, the Chairman addressed the media and stated

that Jet Airways would take back all the sacked employees.

Conclusion: The JET brand’s excellent track record of no strikes for

16 years could loose some shine due to the two employee crisis it has faced in less than one year.

Customers will question whether JET will sustain the Quality of services.

What happened was an internal issue which fell out into the public domain, hence the company must develop crisis management and communication strategies within the organisation.

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