Naresh Goyal and Jet Airways

Naresh Goyal was born in 1949 in Patiala, Punjab. His father, a jewellery dealer, died when he
was 10 years old. Naresh used to walk miles to go to his school as he couldnt afford a bicycle.
His mother struggled to pay his fees. However with the help from her family, Naresh was able
to get basic education. Naresh earned a Bachelors of Commerce in 1967.
Many of his friends went to London for higher education and he had a desire to do the same.
Since he did not have the money to pursue education abroad, he decided to work with his
mothers uncle. His mothers uncle used to run some cinema theatres in India and had an
agency with Lebanese International Airline. Naresh heeded to his mothers advice and joined as
a cashier in her uncles Delhi based agency, Continental travels. For three years he slept in the
office and earned about Rs 2000 a month. Later, Naresh joined as a Sales Agent for Lebanese
International Airlines. Subsequently, he was appointed as the Public Relations Manager of Iraqi
Airways in 1969. From 1971 to 1974 he was the Regional Manager for Royal Jordanian Airlines.
During this period, he also worked with the Indian offices of Middle Eastern Airlines, where he
gained experience in various areas, such as, ticketing, reservations, and sales.
Naresh began to build contacts and, in 1974, with Rs 40000 from his mother, he floated his own
Jetair Private Ltd (then known as Jetair Transportation Private Ltd) to provide sales and
marketing representation to airlines, such as, Air France, Austrian Airlines, and Cathay Pacific
in Indian. Shortly thereafter in 1975, he was appointed as the Regional Manager of Phillipine
Airline where he handled the airlines commercial operations in India.
Nareshs wife, Anita, used to work for the Oberoi hotels in India. In 1979, she joined the
marketing department of Jetair. This is when Naresh met her for first time. Over the years, she
grew from a Market Analyst to a General Manager to a Vice President in Jet Airways. She has
been looking after pricing, scheduling, network, revenue management, and sales and
marketing.
The Indian government nationalized the airline industry in 1953, hence, Indian Airlines (now
Indian) and Air India were the only two airlines in the market. The market opened after the
liberalization in 1991. The government allowed, what it described as, air taxis to operateprivate carriers could fly but they could not print time tables. Naresh spotted an opportunity. In
1993, with the backing of Gulf Air and Kuwait Airways, he leased four Boeing 737 aircrafts and
started Jet Airways. Jet Airways started commercial operations on 5 May 1993. Naresh hired
talent from airlines he admired. He overcame the constraints of not being able to publish a
schedule with inventive zeal. Back in 1993, when other startups were inducting Boeing 737200 aircrafts, Naresh bought new generation Boeing 737-400s. he understood the value of
quality and made sure that he hired the best professional talent in the international market. Jet
Airways was granted scheduled airlines status on 14 January 1995. It became a deemed public
company on 1 July 1996. On 19 January 2001, it was reconverted into a private company. Jet
Airways became a public company on 28 December 2004.

The government of India came with a civil aviation policy on 29 December 2004. According to
the policy, private airlines could fly overseas anywhere in the world except Gulf for three years.
Jet Airways started its operations to Singapore on 18 April 2005 and to London on 23 May
2005 (between Mumbai-London Heathrow), shortly followed by its Delhi-London-Delhi
service. It also started flights to Kuala Lumpur on 18 May 2005.
In its first year of operation, Jet carried 730000 passengers. In 2005, the company, which now
had a fleet of 55 aircraft, carried 10 million people and generated revenues of US $1.4 billion.
Today, Jet Airways has evolved into Indias largest private domestic airline. Naresh Goyal has
an elegant house in a posh locality across Regents Park in London. The Sunday Times (London)
ranked him in 2006 as the sixth richest Asian living in Britan, estimating his wealth at 780
million. He has lived in London since 1991.
Being an NRI based in London only adds to his enigma. He is also said to be a nervous flier who
prays before take-off. In his spare time, Naresh is known to be glued to BOllywood films. No
wonde that film personalities, such as, Shatrughan Sinha and Javed Akhtar have served as
independent Directors on the Board of Jet Airways. Naresh considers Reliance Industries
founder Dhirubhai Ambani as his role model. In the airline industry, he is a great admirer of
Lord Marshall, the former Chairman of British Airways, and J.Y. Pillay, the former Chairman of
Singapore Airlines.
Since its inception, Jet Airways had a clear strategy of focusing upon the business traveler in
India. It offers several services directed towards the convenience of the business traveler,
including telephone check in facilities, priority baggage service, high frequency services on
major routes. Same- day return flights on major routes at convenient timings, point to point
connections, providing flight information on cellular phones of customers, its customer loyalty
programm , e-ticketing, business class section on almost all flights, and airport lounges for
business class passengers at most airports. These facilities and the focus on providing highquality reliable service have contributed to it becoming the preferred airline for business
travelers in India.
Jet currently provides regular scheduled services to 42 destinations in India and operates 1924
weekly flights. It uses five hubsMumbai, Delhi, Chennai, Kolkata, and Bangalore. It maintains
engineering and maintenance facilities at each of these hubs. The major hub of its operations is
Mumbai followed by Delhi, Chennai, Kolkata, and Bangalore. The use of five hubs helps it to
originate flights from these cities.
One of the key elements of the companys business strategy is to maintain high daily aircraft
utilization, which represents the average number of block hours operated per day per aircraft
for the total aircraft fleet. High daily aircraft utilization allows it to enhance the efficiency of its
operations and generate more revenue from its aircraft and is achieved in part by reducing
turnaround time at airports so that it can fly more hours on average in a day. Aircraft
utilization is reduced by delays resulting from the following factors, most of which are beyond
the control of any airline:

-flight crew;

the airline;

maintenance.
A major cause of concern for Jet is the expansion of its business to include new destinations and
more frequent flights on existing routes. This could increase the risk of delays as expansion
increases its exposure to congested airports, longer flight durations, and air traffic congestion.
Delay could reduce its daily aircraft utilization and, in turn, limit its ability to achieve and
maintain profitability as well as damage its reputation. Further, high aircraft utilization
increase the risk that once an aircraft falls behind schedule during the day, it could remain
behind schedule during the remainder of that day, which could result in disruption in operating
performance leading to passenger dissatisfaction. Passengers may get dissatisfied due to
delayed or cancelled flights, or missed connecting flights.

Utilizing aircraft efficiently

Various parameters and data relating to

the utilization of aircraft efficiency at Jet
Airways As of and for the year ended
March 31
2002 2003 2004
Passengers carried (millions) 5.82 6.41
6.91
ASKMs(1) (millions) 7,780 8,496 9,162
RPKMs(2)(millions) 4,777 5,291 5,852
Passenger Load factor(3)(%) 61.4% 62.3%
63.9%
Number of aircraft at period end 38.0 41.0
41.0
Average number of aircraft during period
34.9 38.9 40.8
Number of domestic stations served
(+ international stations served) 44 40
41(+1)
Aircraft utilization(4)(hours/day per
aircraft) 9.66 9.41

As of and for the six months ended

September 30
2003 2004
3.27 3.78
4,542 4,796
2,771 3,245
61.0% 67.7%
39.0 41.0
40.6 41.0
40 42(+2)
9.48 9.84
821 818