Jet Airways is a Mumbai based airline which was incorporated as a limited liability company in April’92. In May’94, all the shares were transferred to Tailwinds International co-held by Naresh Goyal (60%), Gulf Air (20%), and Kuwait Airways (20%). In Oct’97, as result of change in civil aviation policy, forbidding foreign investment in passenger airlines, Goyal took control of the entire company. Etihad Airways is the second largest airline of the United Arab Emirates (UAE) and is based in Abu-Dhabi. It was established as the second flag carrier of the UAE in July’03 by royal decree issued by Sheikh Khalifa bin Zayed Al Nahyn. The airline launched its services on 5th Nov’03. James Hogan was appointed President and CEO of the airlines on 10th …show more content…
This acted as a catalyst in the negotiations (by giving it a positive start). Power Play- In August 2012, both Jet Airways and Etihad Airways teams met in Abu Dhabhi where Etihad was headquartered which gave Etihad team an upper hand. The Etihad team included executives of PricewaterhouseCoopers Pvt. Ltd, HSBC Holdings Plc, and its auditors KPMG to undertake due diligence exercise on Jet while Jet Airways only engaged Ernst and Young to conduct its own due diligence on Etihad. This projects the show of power by Etihad in the early stages of the negotiation. Dissecting the Deal- Jet Airways sought a valuation of $2billion while Etihad Airways valued it at a mere $500million. Etihad wanted to pick up 49% of Jet Airways for $250million but Jet Airways was only willing to part with a 24% stake, this lead to both the team staging walk-outs at different stages of the negotiation. While the Etihad Airways team walked out once, Jet Airways representatives walked out at least thrice over differences in
JetBlue was founded in 1999 by David Neeleman under the name of New Air and later was change to JetBlue. David Neeleman aim to create a low fare flying airline to compete with southwest airline. Many of JetBlue employees were former employees of southwest airline. In 2000 JetBlue begins flying to routes in New York and Florida. The next year they built their second base in Long Beach, California. JetBlue is one of few airlines that was continuously profitable after 9/11.
These things came to light after the two board members filed a suit against them in 2009 and part of the agreement for that suit was to have a forensic financial audit of the ministry and cancel the company credit cards that belonged to the Wingos. Also the company that was formed by Joe for the jet had to be signed over to
JetBlue Airways entered the market in 2000 from a position of financial strength, leadership capability and several rare advantage points uncommon to others in the industry: 1) David Neeleman, the founder, had several years of industry experience as a result of having successfully launched and sold an airline (Morris Air), bringing both explicit and tacit knowledge into the his new venture; 2) Neeleman was afforded the opportunity to work directly with his idol, Herb Kelleher, at Southwest Airlines (the king of the low-cost leaders) after Southwest purchased Morris Air from Neeleman; and 3) Substantial financial support from venture capitalists who had funded Neeleman's previous ventures and were more than willing to support and capitalize on his idea for a new low-cost passenger airline.
Jetstar was the vision for change for Qantas. It was the introduction of a low-cost airline that would prove to be beneficial for the company. Qantas saw that Virgin Blue was successful, so introduced their own.
David Neeleman, CEO and director began JetBlue in 1999 and flying since 2000 after his previous airline company-Morris Air was brought by Herb Kelleher, the Southwest Airline founder. He signed a 5-year non-compete agreement not to launch another airline. Kelleher hired Neeleman at Southwest but was not happy with the structured environment he did not control and was fired (Essentials of Entrepreneurship p78).
Although JetBlue focuses on service value through highly productive personnel and aircraft, potential consumers are still interested in value when they fly; the Price aspect of the marketing mix. Customers are interested in quality service at a reasonable price.
However, poor industrial relations and crisis management imply that there is a greater need to focus on building strong relations with employees, enabling them to internalise the vision of the company. Given intense competition in the industry and continuous changes in regulations from the EU and international regulatory bodies, British Airways needs to introduce cost-effective methods of complying with regulatory standards. The firm should also avoid illegal practices that can harm its corporate image.
Lufthansa, one of the world’s biggest airliners, has divisions handing maintenance, catering and air cargo. Since the World War II the airline industry has never earned its cost of capital over the business cycle (Hitt, 2010). Most of the airline companies have either filed for bankruptcy or are being bailed out by their government. Lufthansa had also gone through these tough times, but had resurfaced to become one of the worlds most profitable airline company. The company adapted a transnational strategy, seeking to achieve both global efficiency and local responsiveness. Lufthansa’s monopoly in Germany came to a halt with the creating of the European Union. All the EU member countries become one regional and therefore the European competition became, an increasingly a local competition. Lufthansa created its regional Hubs, to cater for its domestic market. But the availability of substitutes such as bullet trains and the Euro tunnel, made is necessary for Lufthansa to create short traveling time, customizations and quality standards in the region to achieve a competitive advantage. But outside the EU there are no substitute to air travels as such all the flag carriers are competing in the market, the international airline industry is a highly competitive environment. A new force has also emerged in the world of air travel, in the form of three Gulf airlines with jumbo ambitions. Within a decade Dubai’s Emirates, Qatar Airways and Eithad from Abu Dhabi have between them carried the capacity of two hundred million passengers (Micheal, 2010). The company had to go global and therefore adopted the international corporate-level strategy, where Lufthansa will ope...
Although Southwest Airlines Co. takes only the sixth place in the ranking of Forbes magazine[1], SWA is the world 's largest low-cost carrier, has become the biggest domestic airline in the United States, by number of travelers carried. More than 70 million passengers fly SWA ewery year to over 60 destinations around the continental United States. Passengers have found that Southwest 's affordable tickets create almost a new type of transportation, more in competition with the automobile than other airlines. The potential customers are ready to refuse in-board meals, baggage transfers, and other traditional additions for economically affordable tickets.
During 19991-1992, Modiluft, East West and Damania went bankrupt. Air Sahara and Jet Airways survived along with government own Indian Airlines because they had the capability to bear losses. Globalization and privatization had a major impact on aviation industry. Indian aviation industry was deregulated by the government in 1990s. As a result now 14 airlines are operating today in Indian sky. Now, collaboration with international organization and foreign direct investment are welcome to improve infrastructure and technology. Today people who can not afford high prices of Full Service Carriers (FSC) can travel by Low Cost Carriers (LCC) or budget airlines. Air Deccan was India’s first LCC started in 2003. It flies to several metro and non-metro destinations. All airlines have three major fixed costs i.e. fuel costs, financing or aircraft lease and labour cost. But LCC costs are 10 to 15 per cent lower than FSC. This is because of three reasons. Firstly, saving on distribution cost as passengers book tickets on the internet. Secondly, no frills are offered on board. Thirdly, to accommodate additional seats, catering and cabin crew space in these aircraft has been used. So these aircraft have 40 seats more than the FSC.
Air India airline is one of the biggest airline in the India. It was established by the famous company TATA and since its incorporation. It has grown very well and has spread all over the world in the different destinations. It has become the reputable brand in the airline industry with having the operations over 152 destinations. It has link up connection in the 35 countries and it has currently having 137 fleets. This company becomes the public limited company in the 1946. The company has international and the local route and its performance is increasing day by day with the pace of the good growth as compare to the other airlines in the industries in the area and the channels in which this airline is working.
The first initiative that they were able to gain in competitive advantage was the reduction of costs. They have been able to use an online system where consumers can reserve tickets avoiding which avoids using travel agents. Having this systems reduces costs for the company as well because they do not have to hire nearly as many as employees. Along with buying tickets, JetBlue has been able to use other systems to reduce costs which helps them with the maintenance of their planes and organizing information that involves every aspect of their business ranging from their planes to their employees and consumers. The second initiative that JetBlue uses is the creating of new services. By creating their new online services and systems they are able to gain competitive advantage because it allows easier and less expensive accessibility to their services. Not only have they created new services but they are able to differentiate these services from their competitors because of the easiness and quality of the services that they do provide. They not only focus on making their services the best but also the highest level of customer service that they can offer which other airlines struggle to do. Other competitors have realized that JetBlue is beating them in many aspects in the business that they have needed to adjust what they are doing to catch up. Even with the jumps in technology use with the other companies, JetBlue has still been able to enhance their services to continue to gain competitive
Naresh Goyal, the founder Chairman of Jet Airways, India’s premier airline, has over 4 decades of experience in the Civil Aviation industry.
Porter stated; “for an airline to succeed in the marketplace, it must have a sustainable competitive advantage” (Porter M. E., 2008). The airline industry is the highest competitive industry, and I believe a sustainable completive advantage is essential to succeed in the future of the aviation industry. The competitive advantages that an airline embrace, needs to be based on the airlines strategy and differentiation to competitors. Emirates displays how it has a strategy and how the airline gets ahead of its competitors through how unique it is.