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Project Report Jet Airways
Project Report Jet Airways
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Managerial Economics
Project Report: Jet Airways
Sr. No.
Topic
Pg. No.
Acknowledgement
Corporate Objectives
11
12
Survival Strategy
13
15
19
Bibliography
20
Annexure A
21
10
Annexure B
23
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Project Report: Jet Airways
Acknowledgement
We would like to sincerely thank Prof. Johnson, for his encouragement, guidance and
support from the initial to the final level, which enabled us to develop a deep
understanding of the subject and this project.
We would also like to thank the Director and Principal for this course.
Finally, we would also like to thank our fellow batch-mates for their encouragement.
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Managerial Economics
Project Report: Jet Airways
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Project Report: Jet Airways
The domestic market share chart for the Indian aviation industry
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Project Report: Jet Airways
Managerial Economics
Project Report: Jet Airways
In these 17 years, Jet Airways has emerged as one of India's largest private domestic
airlines, and has been acclaimed by frequent travellers as the most preferred carrier
offering the highest quality of comfort, courtesy, standards of ground and in-flight
services and reliability of operations. Jet Airways currently operates a fleet of 10 - Boeing
777-300 ERs, 48 New and Next-Generation Boeing 737s, 12 Airbus A330-200 aircraft
and 14 ATR72-500s turbo-prop aircraft.
The airline has also been conferred with several national and international awards
instituted by leading organisations including the Market Development Award for 2001 of
Air Transport World (ATW) of USA. Jet Airways has also won the 'Service Excellence
Award' hosted by Global Managers at Mumbai.
Jet Airways with the acquisition of JetLite, today has a combined fleet strength of 107
aircraft and offers customers a schedule of over 444 flights daily.
The Prime Minister, Dr Manmohan Singh presented the first NDTV Profit Business
Award 2006 to Jet Airways, which was received by the Chairman, Naresh Goyal at a
glittering function at Taj Palace Hotel on July 28, 2006. The award, in the aviation
category, is to salute the men and women who fuel India's journey to the forefront of the
World Economy.
Chairman, Naresh Goyal was accorded the prestigious TATA AIG - Lifetime
Achievement Award at the Abacus-TAFI Awards ceremony organized during the TAFI
(Travel Agents' Federation of India) International Travel Convention 2007, on Saturday
8th September, 2007 at the Sutera Harbour Resort in Kota Kinabalu, Malaysia.
Chairman, Naresh Goyal, was conferred with "Travel Entrepreneur of the Year" award at
the 19th annual TTG(Travel Trade Gazette)Travel Awards. The awards were presented at
a glittering ceremony and gala dinner on Thursday 25th October, 2007 at the Sofitel
Centara Grand, Bangkok.
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Project Report: Jet Airways
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Project Report: Jet Airways
Statistics
Jet Airways Domestic Operations Statistics
%
Increase/Decrease RPK
(in PAX)
Cargo
%
carried
Increase/Decrease
(in
(in Cargo)
tons)
Aircraft
Flown
(Block
Hours)
Passenger
seat factor
(%)
April-05
to March- 9,115,459
06
7,875
105,173 -
165,729
73.7%
April-06
to March- 9,900,970
07
8.62%
8,538
117,946 12.14%
190,911
70.2%
April-07
to March- 9,786,980
08
1.15%
8,565
114,240 3.14%
194,916
70.9%
April-08
to March- 7,972,757
09
18.54%
6,884
85,046 25.55%
181,232
66.9%
%
Increase/Decrease RPK
(in PAX)
Cargo
%
carried
Increase/Decrease
(in
(in Cargo)
tons)
Aircraft
Flown
(Block
Hours)
Passenger
seat factor
(%)
April-05
to March- 441,142
06
1,701
10,724 -
17,857
65.0%
April-06
to March- 825,904
07
87.22%
3,770
23,846 122.36%
36,238
68.0%
April-07
to March- 1,641,930
08
98.80%
8,350
51,517 116.04%
72,598
67.5%
April-to
Mar 09
89.25%
131,775
68.2%
Year
ended
Passengers
Passengers
3,107,278
Destinations
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Managerial Economics
Project Report: Jet Airways
Jet Airways serves 44 domestic destinations, 21 international destinations in 17 countries
across Asia, Europe and North America. It is also introducing flights to Africa with daily
flights to Johannesburg, South Africa starting 14 April 2010.
Jet Airways' fleet consists of the following aircraft families as of January 2010
Jet Airways Fleet
Aircraft
In
Service
Orders Options
Passengers
Notes
Seats
ATR 72-500
14
62
Airbus A33012
200
220
226
254
Boeing
700
112
141
7 dry leased.
19 dry leased.
737-
Boeing
800
737-
Boeing
900
737-
Boeing
300ER
777-
13
38
20
140
144
168
175
186
160
4 dry leased to Turkish
Airlines
10
312
3 to be dry leased to Royal
Brunei Airlines
Boeing 787-8
10
Total
89
43
TBD
As of December 2009, the average age of Jet Airways' fleet was 4.54 years.
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Managerial Economics
Project Report: Jet Airways
Best First-Class Service in the World award at Business Travellers 20th annual
Best in Business Travel awards
Full Service Airline by 2006 Galileo Express Travelworld for the sixth year in a
row
Nice Customer Service by Freddie Awards 2007
Indian Domestic Airline with Spectacular Growth at the SATTE 2006 Awards
Best Business Class & Best Economy Class at the Business Traveller Awards
Best Program of the Year by Freddie Awards 2007 & 2006
Best Elite Level for the second year in a row, at the 21st Annual presentation
ceremony of the Freddie Awards 2008
Best Bonus Promotion by Freddie Mercury Awards 2005
Best Overall in Entertainment at the Avion Awards 2010
India's Popular Domestic Airline at the SATTE 2006 Awards
Best Single In-Flight Audio Program at the Avion Awards 2006
Indias Airline at the World Travel Awards, 2006
Best Technical Despatch Reliability by Beaver 2002
Customer and Brand Loyalty award in the Commercial Airlines Sector
(Domestic), at the second Goyal Awards
Best Cargo Airline of North Asia by Cargo Airline of the Year Awards
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
Service Excellence Award at Global Managers in Jurassic Park, Sudan.
Indias Most Respected Company in the Travel and Food Sector by
Businessworld 2003
Runner up for Best Affinity Credit Card by Freddie Awards 2006
Runner up for Best Website by Freddie Awards
First airline in the world to introduce IFE(Sky Screen) in a Boeing 737 Next
Generation.
World's Second airline to introduce private First Class Suites in the air on their
Boeing 777-300ER.
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Project Report: Jet Airways
Corporate Objective
Jet Airways will be the most preferred domestic airline in India. It will be the automatic
first choice carrier for the travelling public and set standards, which other competing
airlines will seek to match.
Jet Airways will achieve this pre-eminent position by offering a high quality of service
and reliable, comfortable and efficient operations.
Jet Airways will be an airline which is going to upgrade the concept of domestic airline
travel - be a world class domestic airline.
Jet Airways will achieve these objectives whilst simultaneously ensuring consistent
profitability, achieving healthy, long-term returns for the investors and providing its
employees with an environment for excellence and growth.
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Managerial Economics
Project Report: Jet Airways
Overall, some further consolidation activity in India is expected in the next 12-18
months, especially in the LCC segment if oil prices stay above USD60 per barrel, which
could help to rationalise industry capacity. This would be a positive development for Jet.
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Project Report: Jet Airways
Survival Strategy
Reducing non profitable flights there by creating the option to return high cost
leased aircrafts
Delayed and deferred pre-purchased aircraft delivery
Upfront cash flow due to early bird tickets for travel 6 months hence
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Project Report: Jet Airways
Higher control of ticket prices where high demand seasons were optimized
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Project Report: Jet Airways
1) Earnings Per Share EPS reduced in Mar-07, but it went down drastically from Mar
08-09.
Mar '05
45.40
Mar '06
52.36
Mar '07
3.13
Mar '08
-28.33
Mar '09
-46.60
An important aspect of EPS that is often ignored is the capital that is required to
generate the earnings (net income) in the calculation. Two companies could
generate the same EPS number, but one could do so with less equity (investment)
- that company would be more efficient at using its capital to generate income
and, all other things being equal would be a "better" company to invest in.
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Project Report: Jet Airways
2) Current Ratio
This ratio gives an idea of the company's ability to pay back its short-term
liabilities (debt and payables) with its short-term assets (cash, inventory,
receivables). The higher the current ratio, the more capable the company is of paying
its obligations. A ratio under 1 suggests that the company would be unable to pay
off its obligations if they came due at that point. While this shows the company is
not in good financial health, it does not necessarily mean that it will go bankrupt - as
there are many ways to access financing - but it is definitely not a good sign.
It is excessively unhealthy. Primarily due to liability increase (negative working
capital, liability exceeds current assets).
The current ratio for Jet airways continuously decreased from Mar 06 to Mar 09
due to an increase in the current liabilities.
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Managerial Economics
Project Report: Jet Airways
Mar '05
1.52
Mar '06
1.66
Mar '07
1.07
Mar '08
0.61
Mar '09
0.37
3) Quick Ratio The quick ratio measures a company's ability to meet its short-term
obligations with its most liquid assets. The higher the quick ratio, the better the
position of the company.
Mar '05
1.21
Mar '06
1.97
Mar '07
1.18
Mar '08
0.77
Mar '09
1.09
Analysis of the current ratios and quick ratios shows that a lot of stock was not sold
and that what made the current ratio unhealthy for the year 08-09.
4) Debt Equity Ratio It clearly shows that the company in over 5yrs is going deeper
into debt.
Mar '05
1.69
Mar '06
2.28
Mar '07
2.88
Mar '08
6.49
Mar '09
12.61
5) Fixed Asset Turnover Ratio By the below figures we can see that it goes on
decreasing each year, which means utilization of fixed assets is reducing.
Mar '05
1.71
Mar '06
1.67
Mar '07
1.24
Mar '08
0.54
Mar '09
0.62
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Project Report: Jet Airways
6) P/E Ratio Higher P/E suggests that investors are expecting higher
earnings growth in the future compared to companies with a lower P/E. However,
the P/E ratio doesn't tell us the whole story by itself. It's usually more useful to
compare the P/E ratios of one company to other companies in the same industry, to
the market in general or against the company's own historical P/E.
Current Status
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Project Report: Jet Airways
Bibliography:
http://www.researchandmarkets.com/reports/449298
http://www.researchandmarkets.com/reportinfo.asp?report_id=595592
http://www.centreforaviation.com/news/2009/06/11/mei-perspective/page1
http://www.thehindubusinessline.com/nic/157/index2.htm
http://myiris.com/shares/company/financial.php?icode=JETAIRPR#ratio
http://www.iloveindia.com/economy-of-india/aviation-industry.html
http://www.moneycontrol.com/financials/jetairways/balance-sheet/JA01
http://www.jetairways.com/EN/IN/InvestorRelations/InvestorFactSheet0910.aspx
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Project Report: Jet Airways
Annexure-A
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Annexure B
The percentage share of various costs Jet Airways absorbed between March 08 and
March 09
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