Scribd
Upload
112 views1 page

Chapter 1 Case Study Case Study

Jet Airways has established itself as a market leader in India operating a fleet of 85 aircraft to 63 destinations globally. Its major costs include aviation fuel, landing fees, and competitive salaries for pilots and personnel. Revenue comes mainly from passenger and cargo fares paid in various currencies. Jet Airways finances new aircraft purchases through borrowing in India and abroad, taking on currency risk with interest payments. It plans further expansion through additional borrowing.

Uploaded by

GANESH
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
112 views1 page

Chapter 1 Case Study Case Study

Jet Airways has established itself as a market leader in India operating a fleet of 85 aircraft to 63 destinations globally. Its major costs include aviation fuel, landing fees, and competitive salaries for pilots and personnel. Revenue comes mainly from passenger and cargo fares paid in various currencies. Jet Airways finances new aircraft purchases through borrowing in India and abroad, taking on currency risk with interest payments. It plans further expansion through additional borrowing.

Uploaded by

GANESH
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 1

Chapter 1 Case Study

CASE STUDY

Jet Airways, which commenced operations on May 5, 1993, has established its position as a market
leader in India. The airline has been repeatedly adjudged India's best domestic airline by Abacus-TAFI
and has won several national and international awards.

Jet Airways operates a fleet of 85 aircraft, which includes 10 Boeing 777-300 ER aircraft, 10 Airbus A330-
200 aircraft, 54 classic and next-generation Boeing 737-400/700/800/900 aircraft, and 11 modern ATR
72-500 turboprop aircraft. With an average fleet age of 4.45 years, the airline has one of the youngest
aircraft fleets in the world.

Jet Airways operates to 63 destinations, both within and outside India. International routes include New
York, San Francisco, Toronto, Brussels, London (Heathrow), Hong Kong, Singapore, Shanghai, Kuala
Lumpur, Colombo, Bangkok, Kathmandu, Dhaka, Kuwait, Bahrain, Muscat, Doha, Abu Dhabi, and Dubai.

Its major cost is the cost of aviation fuel. In addition to fuel costs, the other costs include landing costs at
various airports and baggage handling costs. The remuneration of pilots and airline personnel will have
to be competitive since there is a huge demand for these personnel because of the presence of a
number of new airlines that operate throughout the world.

The revenue for airlines comes mainly from passenger fares and cargo fares. The passengers of Jet
Airways come from various countries and pay their fares in the currency of their own country.

Jet Airways finances the purchase of its airplanes by borrowing money either in India or in other
countries through bond issue. The interest payments will have to be paid in the currency in which the
bond is issued. Future plans for Jet Airways include purchase of additional planes, which will also be
financed through borrowing.

Questions

1. What are the various risks that Jet Airways is facing?


2. How can these risks be reduced using derivative securities?

You might also like