Etihad Airways & Jet Airways Alliance 2017

Abstract

Established in 2003, in a short span of time Etihad Airways became a well-known airline in the aviation industry. Despite a late start, the airline was noticed for its fast expanding global network and introduced the concept of luxury flying. Etihad’s success could be attributed to its strategic partnerships in key global markets and innovation in inflight service. James Hogan, the CEO for Etihad, played a key role in all stake buying of Etihad. He had said: “To become a competitive global network carrier today is incredibly challenging. Partnerships allow us to compete effectively and give us scale and differentiation, as well as reducing cost and delivering major benefits, including operational cooperation, more consumer choice and competition, and job creation.” Jet Airways was the shining star of Indian aviation. Being the first private airline in India, it grew into an established full-service airline and dominated the Indian skies. In its second decade the airline suffered imbalance between its domestic and international operations. With poor strategies, global recession and inability to multitask, Jet not only failed to check domestic competition but suffered setbacks in its ambitious international expansion. By end of 2013, it was in debts worth USD 2.1 Billion. When the Indian government opened FDI in aviation sector up to 49% for international carriers, it opened a flood of opportunities for international airlines and raised hopes also for cash-strapped domestic airlines. The case aims to provide students introspective analysis about international mergers, acquisitions, and strategic alliances in the airline industry. The looks closely at mergers creation, the benefits and synergy issues. Its aims to raise awareness and encourage discussions about why airlines are taking the merger and partnership routes more than ever before to sustain business and keep the market share.

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