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What went wrong with Jet Airways

business Updated: Dec 21, 2014 23:11 IST
HT Correspondent
HT Correspondent
Hindustan Times
Air India

Jet Airways, one of the India’s first private airlines, and its promoter Naresh Goyal were till recently celebrated as the poster boys of the Indian aviation industry.

It was also the market leader till June 2012 when it was overtaken by IndiGo. Jet, the country’s second-largest airline, posted a loss of `3,667 crore in 2013-14 and has been trying to put its house in order after a series of key strategic mistakes, the most important being running a full service and a low cost carrier (JetLite/JetKonnect), which left passengers confused. The airline recently posted its first profit in seven quarters.

“Without key strategic mistakes, Jet Airways might not have required a foreign airline investor,” said a 2013 report by aviation consultancy Centre for Asia Pacific Aviation (CAPA).

Analysts say the acquisition of Air Sahara in 2007 for `1,450 crore diverted the airline management’s attention and precipitated a confused low cost strategy.

“Integration of the two carriers proved to be far more challenging than anticipated and drained capital,” said CAPA.

“We plan to reduce losses in 2015, consolidate in 2016 and turn profitable in 2017. We are already on track as our international business has turned profitable. We now have to take our business forward,” Jet’s CEO Cramer Ball said recently.

Many believe that with Etihad picking up a 24% stake, Jet may be reduced to a “feeder carrier” for the UAE’s national carirer.

With Tata-Singapore Airlines backed Vistara knocking, Jet has bid goodbye to its low-cost brand to focus on the full service model.

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