Jet Airways Bankruptcy: A Case Study in International Management

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INDIVIDUAL CRITICAL ESSAY MB353
INTERNATIONAL MANAGEMENT

Table of Contents
Introduction...............................................................................................................................................3
Conclusion..................................................................................................................................................6
References..................................................................................................................................................7

Introduction
Jet Airways which is a domestic and international airline service in India is bankrupt and due to
heavy competitions from the domestic and international airline services, Jet Airways is losing
their place in the sky. This issue is heavily affected by international management with the other
airline services. Jet Airways was bank erupt and there is no other way for jet airways to come
back if they do not find a new owner. The issue which we will be discussing in this report is
heavily affected by both businesses in the airline service and government. The previous owner of
the jet airways has left their post and resigned. This is a big setback for jet airways in the
international business.
The government of India has decided to give the foreign flying rights of jet airways to other
airline services if jet airways won’t come back soon. This step is also weakening of jet airways to
find a new owner, as anyone would not buy an airline which is bank erupt and losing their right
of foreign flying soon. The employees and bank have urged the government to don't take these
rights as long as jet airways find a new owner and come back on track. There is some number of
airlines which have shown interest in jet airways but they further denied taking. There is a quota
which is decided between the two countries which will be fixed, but many countries have
changed their quotas of foreign flying. There is a big advantage for all the other carriers as they
can get the other seats due to set back of jet airways. The issue arises when jet airways were
down for 1200 crore rupees to the SBI, a public sector bank in India. Later on, bank has denied
giving loan further to Jet Airways which is a heavy setback for Jet Airways. All of these issues
will make the reputation of Jet Airways decrease in the market hence leading to a decreased
customer base.
This issue arises due to bad international management in the airline services. Jet Airways had a
bad arrangement of flights in the international market which created the problem. India is a
developing country and the people mostly want to fly cheap, but jet airways continue to sell the
tickets of heavy cost airlines, and hence they let continue to stay in the premium segment of the
airlines. People preferring low-cost flights of other carriers and hence jet airways loosen its way
in the competition. This issue of jet airways is the result of a bad analysis of the market. The
market was demanding more cost-effective airlines rather than more premium class airlines

(Jain, 2015). The organisation should have a proper pricing policy that is related to its market
segment because Indian being a developing country which has more markets that are based on
providing quality services but at a low price. If Jet Airways starts to do this then they will start to
make profits which will lead to more customers.
The most applicable theory of management in this issue is the bad human resource management
in jet airways. Human resource management is the relationship between the organizations with
its employees. Human resource management takes a big role in developing effective
management between the employees with the services they provide (Ahuja, 2017). The
relationship between the employees with the management of an organization is bad. An
employee of jet airways was not happy with them. Jet airways were in trouble from some time
but there is no such communication between the employees with the management about the issue
they are facing. It is very important to recognize the employee and to motivate them to get the
result they want. The employee attitude is heavily affected by human resource practices, which
impact the attitude of the consumers or travellers towards the airlines or organization. If the
employees of the organisation are not satisfied with their job then they will not work efficiently
and will also not provide their services properly towards the customers. This will lead to a
negative feedback from the customers and Jet Airways will not be able to achieve its
organisational goals without having a proper human resource management set out.
Hence it is very important to understand how HR practices and the treatment of the employee
affect the quality of service and the attitude of customers towards the organization. Good
treatment of the employees will motivate the employee to do good further will improve the way
they treat the customers, and hence will improve the image of the employee towards the jet
airways. Jet Airways did not own a good relationship with their customers. There is no
transparency among the senior management and the employees of jet airways. There are many
practices by the HR department and Jet Airways are competing well in this segment. The bad HR
practices such as not training for the new aircraft, and bad organization of financial aspects in the
airlines have led to a big issue of the bankrupt (Merkert, 2018). If proper human resource
practices are applied in the organisation then the employees will have a better understanding of
how to do their designated job roles. Also, providing a training and development program will
show new employees on how to get the job done in a more efficient manner.

There is a big example of bad management, Jet Airways were going to introduce some new
aircraft for the same they have recruited some new Pilots. The aircraft were not ready to fly due
to bad training and management and the pilots stayed in jet airways for 1 year without even
working as the aircraft were not ready. This leads to a financial issue as these pilots were getting
their salary without working. The effective involvement of the Human resource department is
very important for the improved quality of the services by the airlines (Holt, 2016). The concept
in management is a service delivery gap which is very important to understand, this gap is when
the employees are not working at their best. There are many factors which decrease or increase
this gap such as employee job fit, technology fit, perceived controlling, etc. The HR department
was weak to analyses the hiring candidate for which he or she is posting. IT is very important to
understand whether he or she will work as desired by the airline or not. There are many issues
which have to be overcome, such as complexity of the situations in the airline, and to control the
situation at their own place. If proper human resource management techniques were used then
the pilots that were recruited should have been added to the organisation after the finishing of the
aircraft. This is also a case of bad operations management because the aircraft should have been
tested and then the human resource department should have been notified. There should have
been a communication process between both of the departments.
Market analysis is another concept or theory which is very much applicable in the Jet Airways.
Jet Airways are weak to realize what actual demand in the airline sector is. This is weak
management by jet airways. Proper analysis is required about the needs of the airline. The airline
sector is demanding more and more cost-effective rides or travel, but jet airways were sticking to
the premium class which creates a problem, where at the same time other airliners were
introducing more and more cost-effective flights. HR practices also look after the collaboration
within the organization. Performance driven system is the system which generally monitors the
financial, non-financial aspects of the jet airways. These performance measurements are very
important and have to be measured for focusing on the targets which have to be analysed for
safer and effective integrations of the system (Jory, 2019).
There are some of the challenges which might be faced by the jet airways in the future if they
overcome this crisis. Challenges which they might face are eliminating waste, productive flights,
cabin crew management issues, etc. The knowledge has to increase to for the good and

productive business for jet airways. The growth which the customers will get is mainly focused
on the profit been made by the customers of the organization. Technologies in the aircraft are
also an aspect of development. The new pilot recruitment is not a better option some times to fly
more advanced aircrafts, rather management theory says that Training given to their old trusted
pilots is a lot easier and more confident path or decision to solve the problems (James, 2017).
The international factor which is heavily affecting the jet airways situation is the condition where
jet airways are not ready to enhance the aircraft's technology, and they have done also, but not
able to provide training to their pilots, rather than that they hired some new pilots to fly. This is a
big blunder as good technology and more advanced technology aircraft are been used by the
competitors of jet airways. The poor market analysis of jet airways in Indian airspace is what
they are poor at. Technology is increasing and improving the relationship between the customers
and the employee of the organization. The issue jet airways faced, is due to the poor analysis of
the market of air space, not only in India but internationally also.
The new advanced use of technology has led the senior executives to be replaced by the new
more knowledgeable executives. This change might help the jet airways to bounce back. One big
recommendation which can be given to jet airways is to reanalyse the market, what is the market
demand? This is what they have to get the answer. Competition is very high in the airline
industry. The government is pressurizing the jet airways to get an owner as soon as possible, as it
will help them to get the company back on track.
It is time for jet airways to start rescheduling their flights; they now might need to reanalyse the
market. What people prefer more now regarding air flights. Jet Airways have to use fewer flights
and less amount of money should be bleeding as jet airways have even announced two
consecutive losses in their annual year. They have to start cheaper flights. This is a big issue and
challenge for jet airways to actually provide cheap flights to the customers. Jet Airways is a
premium class air carrier and their aircraft cannot bear a cheat flight to be scheduled. The aircraft
and their technology been built to be used in the premium class aircraft. The total cost of a flight
cannot be gained back by a cheaper flight of economic class tickets. Hence It is recommended to
sell all the premium or some premium class aircraft and buy some economic small aircraft to
take economic flights more than the premium flights.

Conclusion
One good thing which jet airways have done well as international management is, they have
maintained a good corporative network. With good cooperation with the Air France and other
leading airliners, jet airways have successfully made a good position among the air space
internationally. Jet Airways are recommended to take help from these airline giants who may
help them in this situation. The Indian market of airspace demands cheaper aircraft and tickets.
People now more and more are able to travel from aircraft, hence which make them go in
economic or business class. The demand for aircraft is increasing but also the mentality of the
people is to get a cheap ticket first, have disturbed the airspace and demand of jet airways. Jet
Airways are working and spending money in fuelling the demands of the premium segment.
Which created a problem as people are demanding cheaper tickets which other carriers are giving
but jet airways, because they have more premium level aircraft, they were not able to lower their
ticketed rates which lacked them to get the market.
References
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management in public service: Paradoxes, processes, and problems. CQ Press.
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 Horwitz, F., &Budhwar, P. (Eds.). (2015). Handbook of human resource management in
emerging markets. Edward Elgar Publishing.
 Jain, R. K., & Natarajan, R. (2015). A DEA study of airlines in India. Asia Pacific
Management Review, 20(4), 285-292.
 James, P. (2017). Total quality environmental management and human resource
management. In Greening People (pp. 35-48). Routledge.
 Jory, S., Benamraoui, A., Tunahan, H., &Çitçi, U. S. (2019). A Critical Examination of
Etihad Airways Equity Alliance Strategy using a Case Study Approach. Available at
SSRN 3328520.

 Merkert, R., & Webber, T. (2018). How to manage seasonality in service industries–The
case of price and seat factor management in airlines. Journal of Air Transport
Management, 72, 39-46.
 Saranga, H., & Nagpal, R. (2016). Drivers of operational efficiency and its impact on
market performance in the Indian Airline industry. Journal of Air Transport
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 Yin, K. S., Dargusch, P., &Halog, A. (2015). An analysis of the greenhouse gas
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News article: https://economictimes.indiatimes.com/industry/transportation/airlines-/-aviation/
jet-airways-might-lose-foreign-flying-rights-soon/articleshow/69170007.cms