The Jet Airways Collapse: Classic Case of

Misjudged Competitive Strategy

Industry and Competitive Landscape Analysis

Submitted By: Group 8

1. Davinder Pal Singh Arora (B008)
2. Abhishek Chaku (B018)
3. Aagam Jain (B028)
4. Shalini Lodha (B037)
5. Parth Purandare (B046)
6. Arpit Shukla (B055)
The Jet Airways collapse: Classic Case of Misjudged Competitive Strategy

The Jet Story

Jet Airways, the market leader in the domestic Airline industry in India till just a few years back,
collapsed recently. While the media is concerned about its financial mismanagement, the collapse of
its competitive plans is what is led to the loss of its market dominance status and subsequent financial
woes.
1. In 1995, Jet Airways launched as a full-service airline; the private sector response to the then-
dominant entity, the state-owned Indian Airlines.
2. Jet Airways ' quality of service was significantly superior; on planes, at airports, and in
engaging and connecting with its customers. It was a refreshing new service that seemed to be
able to compete with the world's best.
3. When the low cost, no frills airline Indigo was introduced in 2006, the first sign of change
happened and started to become popular. Soon, Jet started reacting. First, by acquiring a
bankrupt Air Sahara; then in 2006, unveiling a 100% economy class, no-frills airline, similar
to Indigo, called Jetlite. Later, in 2009, another brand, JetKonnect, was launched as a low-cost
airline.
4. Unable to distinguish between the low-cost services versus the full-service version, Jetlite got
merged into JetKonnect in 2012. JetKonnect was later merged into the Jet Airways brand in
2014 and the airline became a full-service brand only.
5. While, Indigo looked like a clear winner; Jet Airways looked like a company that had lost its
way. It was soon confirmed; Indigo airlines became the biggest airline in India in 2015, and
Jet Airways ceased services in 2019.
Takeaways from the Jet Airways Competitive Strategy
Jet Airways was designed for a full-service competition for excellence, with business and economy
class aircraft, free meals for all passengers, large well-trained and groomed teams to ensure quality of
service, and access to airport lounges.
Jet tried to change its competitive strategy hurriedly with the arrival of Indigo; by offering a low-
priced, no-frills product as an answer. This brought about a drastic change in its offerings and
operations and the subsequent image of the brand. A price war soon followed. All airlines switched to
dynamic pricing systems where at the moment airfares are dictated by market demand.
Indigo had planned the entire business on the basis of its original competitive strategy of low price,
no-frills product. It wasn't important for them to change anything to fight Jet Airways. So, its product
identity had been persistent and deeply embedded in the minds of customers. On the other side, Jet
Airways reacted to the entry and strategies of Indigo. The role of the company, therefore, continued to
change rapidly. The core customer base was confused and disappointed by the rapid decline in service
offerings. Jet moved away from a model for which it was designed in trying to beat the new
competitor. Obviously, with its existing cost structure, it could not maintain this new model and ended
up in extreme profitability issues.
Alternate Strategies
Focusing on the economics and profitability of its original model, backed by service quality, would
have given Jet a price premium, guaranteeing better business results. Jet could have further enhanced
the perception of being a premium service by adding facilities for passengers in the economy class
and taking an even higher price; perhaps by creating a segment called "premium economy."