Changing Dynamics of the Indian Civil Aviation Industry: Jet-Etihad Strategic Alliance

Changing Dynamics of the Indian Civil Aviation Industry: Jet-Etihad Strategic Alliance
Case Code: BSTR436
Case Length: 14 Pages
Period: 2012-2013
Pub Date: 2013
Teaching Note: Not Available
Price: Rs.400
Organization: Jet Airways, Etihad Airways
Industry: Aviation
Countries: India; Middle East; Global
Themes: Strategic Alliances, Joint Ventures, Macro-Environmental Analysis, Industry Analysis
Changing Dynamics of the Indian Civil Aviation Industry: Jet-Etihad Strategic Alliance
Abstract Case Intro 1 Case Intro 2 Excerpts

Background Note

The history of Jet Airways dates back to April 1, 1992, when it was incorporated as an Air Taxi Operator. Next year, it started commercial operations with four leased Boeing 737-300 aircraft. On January 4, 1995, Jet started operating as a full-service scheduled airline. In the early 2000s, Jet overtook India's national airline, Indian Airlines, in terms of passengers carried. In March 2004, Jet started international operations from Chennai to Colombo. By the end of 2004, it was providing regular scheduled services to 42 destinations in India and to two international destinations. With a fleet size of 42 aircraft, it was operating 1,924 flights weekly.

In March 2005, Jet came out with its IPO (Initial Public Offering) and became the first Indian airline to issue shares to the public. The much anticipated IPO raised Rs . 18.99 billion through the sale of 20 percent of the company's equity. The company stated that it would use the money to fund its international expansion plans. On May 23, 2005, the airline launched its first inter-continental flight to link Mumbai with London Heathrow. This was a non-stop day flight. In 2006, Jet signed a special code sharing (SPA) agreement with American Airlines , then the world's largest carrier, for flights between India and the US........

Etihad Airways, the flag carrier of the United Arab Emirates, was founded in July 2003 and was based in Abu Dhabi. It started commercial operations in November 2003 and became the fastest growing airline in the history of commercial aviation. To achieve quick growth, Etihad had followed a strategy of entering into alliances and buying stakes. In AirBerlin, it had a 29.21% stake, in Air Seychelles 40%, in Virgin Australia 10%, and in Aer Lingus 2.98% stake.

In 2008, at the Farnborough International Air Show, the airline announced the largest aircraft order in commercial aviation history for up to 205 aircraft. Over the next 10 years, it had a plan to take delivery of: six Airbus A330s by the end of 2011; 20 A320s between 2011 and 2015; 10 Airbus A380s from 2014; 25 A350s between 2017 and 2020; 35 Boeing 787s between 2014 and 2020; and 10 Boeing 777s between 2011 and 2013...

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