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OPERATIONS MANAGEMENT
CASE STUDY
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Submitted By:
MANASI S. DAPTARI
Roll No. 40c
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Subject Faculty: Prof. Vincent Fernandez
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OPERATIONS MANAGEMENT
CASE STUDY
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Submitted By:
MANASI S. DAPTARI
Roll No. 40c
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Subject Faculty: Prof. Vincent Fernandez
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½et Airways¶ Strategy, Operations & Competitive Position
CASE-STUDY
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½ET AIRWAYS:
Ñ In early 1990¶s Mr. Goyal took the advantage of the Indian Government¶s Open
Skies Policy to announce the launch of his own airline.
 Ñ ½et Airways began its operations in May 1993.
Ñ Goyal was very systematic about the strategy and operations of ½et Airways by
leveraging all his experiences and contacts in the airline industry.
Ñ He hired a fleet of new Boeing 737 aircrafts, primary through leasing.
Ñ Careful staffing policy was adopted by ½et.
Ñ ½et hired expatriates for flight operations, flight engineering and service quality.
Ñ Experienced Indians who worked for Global Airlines were also roped towards ½et.
Ñ ½et Airways (India) Private Limited is India's leading private airline.
Ñ It boasts a market share of about 29 percent.
Ñ ½et operates a relatively young fleet of Boeing 737 jets and ATR72 turboprops.
Ñ It carries about seven million passengers a year.

PROBLEM DEFINITION:
³Even though being the largest private airline in India, ½et Airways is still not considered
as the best airline service.´
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Market Segments:
Ñ Economic Class
Ñ Business Class
Ñ Premium class

Target customers
Ñ Business Class
Ñ Economic class (½etLite)

UNIQUE SELLING PROPOSITION

Ñ Customer relationship
Ñ Punctuality
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STRATEGY AND OPERATIONS:
In 1990¶s its strategy was to position itself differently from the dominant player in
Indian aviation (Indian Airlines) who had a valuable backing of national government.
The airports & planes belonging to Indian Airlines were badly maintained in 1990¶s
giving the opportunity for ½et Airways to give a best start to enter the Indian aviation
market.
The staff of Indian Airlines was indifferent (sometimes rude) to passengers.
Providing better hospitality to the customer can definitely attract their customers.
Indian Airlines was also known for its inordinate delays & even cancellations.
½et can grab the opportunity to attract customers by being punctual & regular non-
cancelled flights. Being such an airlines their regular fliers would get away from the
Indian Airlines & divert towards ½et
³When customers have choices they would definitely choose the best one.´

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SWOT ANALYSIS
STRENGTHS:

Ñ A phenomenal and well-developed network both of the airline and the chairman.c
Ñ Goyal's knowledge of the sector.c
Ñ A Strong brand.c
Ñ A massive pool of loyal customers.c
Ñ Excellent lobbying skills and ability to leverage connections within government.c
Ñ Ability to survive downturns earlier.c
Ñ Has built a professional organization.c
Ñ Market driver
Ñ Experience exceeding 14 year
Ñ Only private airline with
Ñ Market leader
Ñ Largest fleet size

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WEAKNESSES:

Ñ Loosing domestic market share

Ñ Scope for improvement in in-flight service
Ñ Weak brand promotion
Ñ A perceived drop in service standards when pitted against Kingfisher.
Ñ Poor people management skills of chairman.
Ñ Inability to raise money for the last two years.
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OPPORTUNITIES:

Ñ Route and fleet expansion.

Ñ Technological improvements in Airplane design, operation and maintenance.
Ñ Scope in international service and tourism.
Ñ Being punctual in the flight run can almost be a major factor to attract not only
business class customers but also economic class customers too.
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THREATS:

Ñ September 11th Attack

Ñ Staff Salaries:
For instance, pilots¶ salaries increased from average 35000-50000/month to Rs.
1,00,000/month.
Ñ Poaching of staff:
½et Airways estimated that nearly 50% of their staff was employed by different
competitors.
Ñ Strong Indian competitors:
Such as King Fisher, Indian Airlines, Go Air, Spice jet & Indigo.
Ñ Fuel price hikes:
The Indian airline industry was flying high but the sudden hike in fuel prices
brought down the faith of other major players in the same field including Air India,
½et Airways, Kingfisher and Spice½et.
Ñ Overseas market competition:
Such as British Airways, South West Airlines

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PEST ANAYSIS
POLITICAL FACTORS:
Ñ September 11th terrorist attacks.c
Ñ Political Stability.c
Ñ Competitive Airline Industry.c
Ñ Regulatory factors.c
Ñ License issue for international operation.
Ñ ½et Airways Inc based in US alleged in filing with the US department of transportation
that ½et airways India has links with Al Qaeda.

ECONOMIC FACTORS:
R Rising income level.
R Improved purchasing power.
 R Rise in inflation.
R Rise in oil prices.
R Reduced fare but not yet enough

SOCIOLOGICAL FACTORS:
Ñ Greater Customer awareness.
Ñ It believes in hospitality and courteousness.
Ñ The 11th September incident also has made a significant effect in people¶s mind.

TECHNOLOGICAL FACTORS:
Ñ Internet based services to its customer such as:c
R Online ticket booking.c
R Updated flight information,c
R Tele-check in & handling of customer complaints.c
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THE 3C¶s:

CUSTOMERS:
The customers are:
Ñ Business Class travelers.
Ñ Corporate.
Ñ Leisure Travelers.
Ñ Students

½et airways needs to be more customer oriented and it should try to satisfy their
customers with better services. Following things needs to be considered :
(a)For frequent fliers proper data should be made and priority should be given to them.
(b) Regular check-in should be done for seats, air conditions and lights.
(c) Cabin crew staff should be cheerful, energetic, enthusiastic, polite and helpful.

CORPORATION

½et Airways is an airline based in Mumbai, India. It is India's third largest airline
after Air India and Kingfisher Airlines. It operates over 400 daily flights to 64 destinations
worldwide. Its primary base is Mumbai's Chhatrapati Shivaji International Airport with
secondary hubs at Bangalore, Brussels, Chennai, Delhi and Hyderabad, Kolkata and
Pune as focus cities.
COMPETITORS:
Ñ International Market :

British Airways

South West Airlines

Ñ Domestic Market :

King Fisher

Indian Airlines

Go Air

Spice jet

Indigo

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PORTER¶s FIVE FORCES

Ñ p
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½et needs to look at whether there are substantial costs to access bank
loans and credit. If borrowing is cheap, then the likelihood of more airliners
entering the industry is higher. The more new airlines that enter the
market, the more saturated it becomes for everyone. An airline with a
strong brand name and incentives can often lure a customer even if its
prices are higher.
Ñ Ê
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The airline supply business is mainly dominated by Boeing and Airbus.
For this reason, there isn't a lot of cutthroat competition among suppliers.
 In other words, you probably won't see suppliers starting to offer flight
service on top of building airlines.
Ñ Ê
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The bargaining power of buyers in the airline industry is quite low, there
are high costs involved with switching airplanes, but also take a look at the
ability to compete on service.
Ñ Y cc 
What is the likelihood that someone will drive or take a train to his or
her destination? For regional airlines, the threat might be a little higher
than international carriers. When determining this you should consider
time, money, personal preference and convenience in the air travel
industry.
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Highly competitive industries generally earn low returns because the cost
of competition is high. This can spell disaster when times get tough in the economy.

STRATEGIES

1. STRENGTH- OPPORTUNITIES STRATEGIES

They have to focus on increasing tourism to expand their business by
taking advantage of their strong brand value and reputation in mind of
customer.

To penetrate international market they need very much use of their quality
and continuous innovation.
2. WEAKNESS- OPPORTUNITIES STRATEGIES

They need to take advantage of expanding tourism industry as still it is not
a profit making organization.

To diversify their competition they need to penetrate into international
market and cover.

3. STRENGTH- THREAT STRATEGIES

To fight competitors use their brand value and reputation.

Use continuous innovation techniques to generate more promotional
strategies.

4. WEAKNESS- THREAT:

Cut down their prices to lower the impact of economic slowdown.

Try to minimizing their competition by differentiating more.