Top Story

Home >> Marketing >> Article

Winning consumer confidence back key to Jet Airways reviving its brand image?

08-August-2018
Font Size   16
Winning consumer confidence back key to Jet Airways reviving its brand image?

Last week, speculations were high that India’s second biggest airline by market share, Jet Airways, will shut its operations in two months because of a financial crisis. Media reports suggested that the company’s financial position is not robust and is facing difficulties in running the business.

Adding to the speculations was Jet’s quarterly results. The company reported a loss of Rs 1,040 crore in the fourth quarter of the fiscal 2018. Annually, the company posted a consolidated loss of Rs 634 crore compared to a net profit of Rs 1442 crore last year. The chairman of the airline, Naresh Goel, reportedly met stakeholders and pilots to discuss measures to revive the airline. The company reportedly requested the pilots to take a pay cut for two years. However, Jet Airways’ CEO Vinay Dube in an official statement later said that “the recent media reports about the sustainability of the airline are not only incorrect, but also malicious” and denied any conjecture of a stake sale.

Though the company might not accept the reports, it’s clear that the brand is going through a rough phase. There have been several reports of booking cancellations as well.

This brings one to an important question: How is the entire controversy affecting Jet’s brand image?

Experts say the fiasco may cause a dent to the brand’s image.

Saurabh Uboweja, CEO, Brands of Desire, believes that the effect on the brand’s image is highly adverse. “The effect is highly adverse. And that gets immediately reflected in their stock prices, which have seen major fluctuations in the recent time from an all-time high in Jan 2018 to a three-year low it is currently at,” he said.

“To top it up, passengers will be suspicious of Jet Airways' ability to service them effectively, specifically raising concerns around safety,” he added.

Talking about the damage control that the brand can do to salvage the situation, Uboweja said, “They have done some already by reversing their decision to cut pay by 25 per cent and clarifying their position around the 60-day survival rumour. However, the truth is that the airline is in a precarious situation due to a highly complex operational structure, legacy processes, a confused positioning and a top-heavy organization. Under such circumstances, they will first have to aim at winning back passenger confidence before they undergo any major reforms for ensuring long-term sustainability. But for that to happen, they need to have short-term funding to secure their immediate future.”

According to N Chandramouli, CEO, TRA Research, “It is unfortunate that the news had to break in the manner it did. To see a news item that says 'take a cut, or we shut down' shows desperation and it was not handled in the best manner. Since there are alternatives already being looked at, after refusal of the 25 per cent pay cut proposal, it is evident that all options had not been explored before making this statement.”

When asked about the measures that the brand can take to revive its image, Chandramouli said, “The airline business is not an easy one for sure. Only the low-cost airlines or the ones which have a sharp focus on costs, seem to be doing well right now. However, the way to bring the situation under control is to make quick negotiations and come to a path of cost control immediately. Once the path is clear, it must be communicated with equal force to bring back faith of those who have lost it.”

“For Jet to redeem itself, dramatic, quick and life-saving action needs to be taken. With rising fuel costs, the only other places to negotiate are salaries and lease agreements. More equity sale is also a route to redemption,” he added.
Brand strategist Nupur Krishna believes that if the rumours around the airline being grounded on account of failure to manage their economic coffers do come to pass, it shall be a further blow to an already ailing brand.

“Jet Airways has been in the news in the recent time for all wrong reasons, be it surpassing Air India for worst on-time performance and landing second best in terms of customer complaints or mounting debts and financial losses. All these factors stack up in undoing the efforts of Jet Airways team in building their brand," said Krishna.

“With Jet serving both ends of the price spectrum, the effect of a shutdown on passengers is going to be considerable. It would add to the airline’s notoriety for inconsistent performance and would send their business to the competitors. On the flip side, Indian economy flyers are extremely price sensitive and they will continue to choose the airline with the best deal. Even though Jet’s image may take a huge hit after the grounding, in the long run I think it won’t affect customer traffic adversely,” Krishna believes.

However the company is confident of a turnaround. A company spokesperson said the implementation of measures by the company will help them address all the current issues.

Jet Airways has the second-highest market share of 15.5 per cent amongst domestic carriers. Back in February 2015, the airline swung into (marginal) profitability after reporting losses for seven consecutive quarters. Then, it reported standalone revenue of Rs 6,055.15 crore during the March 2018 quarter, down from the Rs 6,271.21 crore it reported during the same period of the previous year.

Telugu daily Sakshi has completed a decade in the newspaper industry. Group's Director-Advertising and Marketing talks about the newspaper's journey so far

The MD of Sai Estate Consultants, Chembur, on their marketing strategy, adopting a carpet bombing approach, response to the Wajood app and why he now allocates maximum of his marketing spends on digital

Prachi Mohapatra on fbb’s latest campaign, one-year after going omni-channel, and its growing reliance on content marketing

The marketing head of Greenpanel on marketing approach and how the company is working towards educating consumer about MDF

right
left
INDUSTRY VETERANS ADDRESS ATTENDEES AT THE INMA SOUTH ASIA MEDIA FESTIVAL @DELHI RADIO CITY RECOGNIZES BUSINESS ICONS AT DELHI ICON AWARDS 2018 KARAN THAPAR & SHEKHAR GUPTA DISCUSS JOURNALISTIC ETHICS AT THE PRINT’S ‘OFF THE CUFF’ WOMEN ECONOMIC FORUM AWARDS 2018 RECOGNIZE WOMEN LEADERS OF THE DECADE THE 6TH EDITION OF IAA AWARDS RECOGNIZES THE WORK OF INDUSTRY PROFESSIONALS 11 INDUSTRY EXPERTS PRESENT  THEIR FAVOURITE DIGITAL CASE STUDIES @AD CLUB’S ‘D-CODE BUSINESSWORLD LAUNCHES 14TH EDITION OF MARKETING WHITEBOOK IN MUMBAI INDUSTRY VETERANS CHEER AS ADMAN AMBI PARAMESWARAN LAUNCHES NEW BOOK SPONG AAAI HONOURS VETERAN ADMAN RAM SEHGAL WITH THE 2018 LIFETIME ACHIEVEMENT AWAR PITCH TOP 50 BRANDS 2018 AWARDS COMPANIES WITH BEST MARKETING PRACTICES TEAM BBDO ORGANIZES AJAI JHALA’S FAREWELL WITH FRIENDS & ASSOCIATES RADIO CITY CELEBRATES ITS 17TH ANNIVERSARY WITH CONCERT, AWARDS AND FUN 5TH EDITION OF TIMES NOW & ICICI BANK’S NRI OF THE YEAR AWARDS GLOBAL INDIANS PITCH CMO SUMMIT BENGALURU SEES TOP INDUSTRY LEADERS AND MARKETERS IN ATTENDANCE DISTINGUISHED JURY COMES TOGETHER TO PICK WINNERS FOR PITCH’S TOP 50 BRANDS PITCH CMO SUMMIT BANGALORE SEES TOP CMOS ACROSS INDUSTRIES IN ATTENDANCE 1ST REPUBLIC TV GULF INDIAN LEADERSHIP SUMMIT & AWARDS HONOUR STALWARTS OF INDIAN GULF BUSINESS COMMUNITY SONY YAY! CELEBRATES ITS FIRST BIRTHDAY WITH PARTY FOR TRADE PARTNERS THOUGHT LEADERS AND TOP DIGITAL MARKETERS SPEAK @ EXCHANGE4MEDIA GROUP’S TECHMANCH 2018 IN MUMBAI EXCHANGE4MEDIA’S IDMA 2018 RECOGNIZES INDUSTRY’S BEST DIGITAL MARKETING CAMPAIGNS

#ShineWithBBLUNT campaign promotes at-home high shine crème hair colour range Salon Secret

The public can make contributions to government account number 10210100412397. IFS Code is FDRL0001021.

Your weekly news roundup, a summary of some of the stories to keep an eye on