Why did Jet Airways fail
Jet Airways on the tarmac

Jet Airways still evokes a sense of nostalgia though I admit AirAsia’s hot lachha paratha beats the bun and coleslaw of the erstwhile Jet Airways in its dying days. In the 2000s, Jet Airways mini-dosas were the first taste of home after weeks travelling in the US or Europe on horrible airlines. And their staff were really nice, even when they were unpaid. The seats were definitely much more comfy. What was not to like? Why did Jet Airways fail? Like Kingfisher Airlines which is still the gold (or red) standard for Indian air travel for many.  Do you remember their sofa buses – you felt like a king sitting in this very fancy bus. 

What happened to Jet Airways

At the heart of the matter is how much customers are willing to pay for the extras. Jet Airways had a bit more legroom which resulted in less number of seats on each plane. So if, say, I have 25% less seats – and therefore carry less customers – I would expect you to pay the difference as a premium. Similarly if a hot meal costs more to carry on the flight, then I’d hope that it would be a differentiator and you’d either pay more or show loyalty to the dosa.  

Was pricing a factor in their failure?

But what if the customer says I’m ok to scrunch up my legs, pack my own lunch box and pay less? Every flight makes less than you planned. Airlines are a cautionary tale of what happens when you focus on some of the 4Ps (positioning & product) and ignore others (Price in this case).

Was it just fatigue that made Jet Airways fail?

If you’ve been online reading business stuff you’d have definitely seen the “Amazon will also go bankrupt, says Jeff Bezos” clickbait. You’ll find a bland article about how Mr Bezos has said, against the backdrop of the Sears bankruptcy in the US, that most companies have a life span of 25 years and even Amazon could fail if it does not find the next disruption. Jet celebrated its silver anniversary before it failed.

Sears is a 100 year old retailer that started life with a snail mail catalog then became a big-box retailer. Their failure was perhaps in not going back to their catalog business when new tech made it feasible in a whole new way.

But grand old companies like Coca-Cola are still going strong despite all kinds of new trends and competitors – they even launched “Colour” a Tamil Nadu specific fizzy drink with grape juice. “Colour” is the generic name for soft drinks in that State so this shows great insight. 

British Airways has been flying to India for over 90 years!

Take this quiz of old Indian brands that ought to be world famous!

Sometimes brands live on in unexpected ways. Perhaps after the spate of weddings in the family last year the Ambanis are dreaming of nurseries now. Reliance just purchased Hamley’s the quintessential British toy brand from er, a Chinese company.  It is possible that the Jet Airways brand will live on. 

What will happen to Jet Airways?

As of October 2021, efforts to revive Jet Airways seem mired in litigation.  The new consortium is trying to put things together, but it is not known what will remain from the old brand.  What happened to Jet Airways was drastic and is now long enough ago that consumers may have forgotten. 

What can Akasa Air and Air India learn from the failure?

  1. The volume market in India is value driven. Successful brands understand the distinction between price and value.
  2. A brand needs to have a simple “heuristic” to identify its ‘reason to choose” . For example, Indigo is known for being ‘on-time’. An attribute that customers valued.
  3. There are many variables not in the control of the brand owner – fuel price, landing slots. Indigo struggles to honour its on-time commitment if there is congestion or fog at the airports and there is nothing they can do about it.
  4. All 4Ps are equally important

There is no easy answer to why did Jet Airways fail. It is a combination of supply chain and financial management, cost-controls and the differentiation being eroded by an inability to handle the other two. Marketing rarely controls price – that rests in the hands of the CEO and the business model.

Akasa Air
Akasa Air gets NOC in October 2021


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