Jet Airways today announced the resignation of Wolfgang Prock-Schauer, its Chief Executive Officer of the past six years. Prock-Schauer’s exit could mark the beginning of a strategic operations overhaul in India’s first post-liberalisation airline brand that toppled Indian Airlines to become market leader with a 48% share in 2002-03, but which has since seen a gradual slide.

Launched in 1993, Jet had emerged as an iconic Indian brand, and was best placed to buck the downtrend after a decade of dominance in domestic skies. Instead, partly driven by greed and ambition, and partly succumbing to adverse economic conditions, the Naresh Goyal-promoted airline frittered away much of the gains of its first decade in the last five-odd years. It made several strategic mistakes, which it is now desperate to correct.

As fierce competition played out in Indian skies beginning 2003, Jet embarked on a strategy of expanding aggressively in the overseas market (it started flying abroad in mid-2004) instead of consolidating its domestic operations. This, along with its promoters’ aversion to diluting holding and instead preferring to time the market for better valuation, and worse, leaving the function of innovation to competition, ate into its market share.

To make up for all this, Jet acquired Air Sahara, now JetLite, for Rs 1,450 crore in April 2007 after an aborted attempt a year earlier. “This was Jet’s biggest strategic mistake — a very expensive acquisition without really knowing what it brought to the table,” said Kapil Kaul, CEO, Centre for Asia-Pacific Aviation, a consulting and research firm. The acquisition ruined Jet’s finances, drowning it in debt and forcing it to join others to knock at the government’s door for a bailout last year.

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