Abstract

The case is about the strategic alliance between Jet Airways (Jet), India’s second largest airline both in terms of market share and passengers carried, and Etihad Airways (Etihad), the national carrier of the United Arab Emirates (UAE). The alliance was announced on April 24, 2013. According to the deal, Etihad would take a 24 percent stake in Jet for US$379 million. The deal was expected to be beneficial for both the airlines in terms of wider network, better distribution, revenue growth, and cost savings. The strategic alliance was expected to strengthen Jet’s financial position. Besides, Jet would benefit from Etihad’s global network and would be able to establish a Gulf gateway in Abu Dhabi for its flights to the US, Europe, Africa, and the Middle East. Etihad would also use Jet’s connectivity to capture India’s rapidly growing aviation market. The case discusses the alliance in detail and the rationale behind it against the backdrop of the Indian civil aviation industry. The case ends with a discussion on the challenges that lie ahead for the alliance as it faces many regulatory hurdles.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Study and analyze the structure of the Indian civil aviation industry
• Analyze the competitive strategy of a full service Indian airline and a foreign airline that wanted to tap the potential of a key emerging market
• Understand the issues and challenges of framing strategic alliances with foreign airlines in the context of the Indian aviation industry

Keywords

Macro-environmental Analysis, Industry analysis, Industry structure, Regulatory environment, FDI Regulations, Changing Dynamics, Indian Civil Aviation Industry, Game-changing opportunity, Strategic Alliances, Synergy, Competitive strategy, Competitive advantage, Emerging market, India, Middle East