Now the airline is faced with a vicious labour dispute in India that has crippled its operations, not to mention its reputation.
Close to 500 pilots called in ‘sick’ to protest against the company’s dismissal of four of their colleagues. As a result, Jet Airways had to cancel around 230 international and domestic flights a day, affecting 100,000 travellers. During the strike, the company set up a crisis management centre to respond to daily situations.
Jet Airways chairman Naresh Goyal has warned of stern action against his pilots (who he has, perhaps unwisely, labelled as behaving like “terrorists”), if they continue to report in sick “in violation of a Bombay High Court order”.
Local media outlets have speculated that Jet Airways suffered daily losses of up to US$4 million during the three-day strike. A senior executive at the airline said the disruptions would have more “far-reaching repercussions” for the company’s finances. Indeed, last week the company estimated that the crisis had cost it $80 million in revenue.
Now the dispute with pilots is over, the airline needs to repair its corporate image and its brand reputation. The row made headlines all over the world, casting Jet in a bad light. It will have to work overtime to win back the customers it has lost as well. Frustrated passengers have shown their dissatisfaction by cancelling bookings, which plummeted by more than half during the crisis.
Jet began its fightback late last week, announcing a three-day half-price seat sale, news of which boosted its share price.
The airline appointed Interpublic Group to handle its $30 million global creative account in June 2008, but the Indian carrier subsequently had to put its ambitious expansion plans on hold because of soaring oil prices and heavy losses for its last fiscal year.
Now, with the airline business still under pressure globally, it faces the difficult task of rebuilding momentum.
Close to 500 pilots called in ‘sick’ to protest against the company’s dismissal of four of their colleagues. As a result, Jet Airways had to cancel around 230 international and domestic flights a day, affecting 100,000 travellers. During the strike, the company set up a crisis management centre to respond to daily situations.
Jet Airways chairman Naresh Goyal has warned of stern action against his pilots (who he has, perhaps unwisely, labelled as behaving like “terrorists”), if they continue to report in sick “in violation of a Bombay High Court order”.
Local media outlets have speculated that Jet Airways suffered daily losses of up to US$4 million during the three-day strike. A senior executive at the airline said the disruptions would have more “far-reaching repercussions” for the company’s finances. Indeed, last week the company estimated that the crisis had cost it $80 million in revenue.
Now the dispute with pilots is over, the airline needs to repair its corporate image and its brand reputation. The row made headlines all over the world, casting Jet in a bad light. It will have to work overtime to win back the customers it has lost as well. Frustrated passengers have shown their dissatisfaction by cancelling bookings, which plummeted by more than half during the crisis.
Jet began its fightback late last week, announcing a three-day half-price seat sale, news of which boosted its share price.
The airline appointed Interpublic Group to handle its $30 million global creative account in June 2008, but the Indian carrier subsequently had to put its ambitious expansion plans on hold because of soaring oil prices and heavy losses for its last fiscal year.
Now, with the airline business still under pressure globally, it faces the difficult task of rebuilding momentum.
| FACT BOX |
| - More than 500 of Jet Airways’ pilots called in sick and refused to report for work as part of an organised strike against the airline. They were protesting against the company’s dismissal of four pilots. - Up to 100,000 passengers were affected, with airports witnessing chaotic scenes. The airline had to cancel around 230 flights a day. - The company estimates lost revenue of around US$80 million. |
Jasmin Sohrabji, managing director, OMD India
“In the past, I have shared a love-hate relationship with Jet Airways. But over the years two clear opinions have come to stay. First, Jet offers a truly first-class experience. Second, the airline has totally redefined the aviation industry in India. A five-day inconvenience cannot take that away from Jet so easily.
Luckily for Jet, it’s a divided house; most of those who were inconvenienced by the supposed strike are upset with the pilots, but empathise with the airline. I do not for a moment believe this incident will turn Jet’s patrons away in a hurry.
However, in times of overall low customer loyalty, each day fliers are exerting a choice of airline and irate customers will shop around; options are aplenty and tempting. Jet needs to stay focused on the reason why it enjoys its patronage — the true Jet experience cannot be compromised in the name of financial austerity.
Additionally, the airline should not just sit pretty while returning to normalcy, but take visible steps to fix its pilot differences; while pilots may be a faceless lot in this service industry, no passenger wants to be reminded that his carrier is being flown by a disgruntled pilot.”
Gavin MacDonald, regional planning director, Ogilvy & Mather Asia-Pacific
“There is nothing like an unpleasant customer experience to generate word-of-mouth, and there is nothing like being marooned at an airport for sustained unpleasantness.
However, you have to feel a little sorry for Jet Airways, in that the controversy it faces feels structural to the industry rather than of its own contriving.
Unlike, for example, Ryanair’s attempts to charge for wheelchairs on flights, it is not the author of its own negative press. While the issue did not originate as a brand or image problem, perception is reality when it comes to brand reputation management, and has now to be dealt with on that level. The difficulty is that, as with the banks, any attempt to address the current issues via traditional branded communication is in danger of feeling like a diversionary tactic.
The best action it can take would be immediate steps to fix its troubled labour relations, which won’t happen overnight.
The best gesture it could make would be a heartfelt apology to the people it has let down, informing the public of whatever steps it is taking to ensure this crisis will not happen again.”
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This article was originally published in 24 September 2009 issue of Media.