Jet Airways flies on innovation wings

There is a transparent sense of relief at Jet Airways. “It’s time to start smiling again,” reads the caption of the airline’s 2010 annual report.
“It’s all about efficiency, reducing costs and excess capacity, and being more reliable,” said Jet Airways’ chief executive Nikos Kardassis, who returned to the position after an earlier stint between 1993 and 1999. “The strategy was to be best on on-time performance, own the best product on ground and air, improve yields and operating margins, deleverage balance sheet, and also grow.”
While all the airlines are talking about cost-cuts and route rationalizations to turn things around, the Jet Airways durbar formulated a number of innovative strategies—some that sector experts openly disagreed with at the time, only to take back their words today.
These include improving efficiency, increasing flights on existing and new routes without adding new aircraft, reducing the weight of flights to scale back fuel expenses, and launching a second low-cost carrier.
As a first step, Jet Airways halted its expansion programme for long-haul international flights in November 2008—following an 82% rise in jet fuel costs in August that year compared with the same month a year earlier. It also pulled out loss-making long-haul routes, including US routes, and replaced some Boeing 777 aircraft with the smaller Airbus A330s.
In the preceding two years or so, the airline had been adding two new flights every month.
Without adding a single aircraft, Jet Airways started expanding its flights to West Asia, where the gestation period for flights is 6-12 months, unlike 18 months for long-haul routes.
Jet Airways also started carrying passengers from Bangkok to London via Mumbai and back, a model that has been adopted by Singapore Airlines Ltd and Emirates.
Starting in early fiscal 2009, Jet Airways saved $600 million in a year’s time—$160 million through network restructuring, $170 million with cost-cutting programmes and $270 million by cash conservation measures such as delayed repayment of loans and renegotiating with vendors.
18/08/10 P.R. Sanjai/Live Mint

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Categories: Jet Airways Aug 2010