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The case aims to understand and analyse the capital structure decisions made by a profit-making, growing organisation which aimed to be India’s premier airline and the market leader. The company that had pursued a high debt policy, to take advantage of the financial leverage that it would get, was now facing problems in an operating environment that proved to be challenging. A decline in operating profit, coupled with high-interest costs and an uncertain environment with cutthroat competition, had caused the company to plunge into losses. Attempts to deleverage by equity infusion were proving to be difficult. The case can be used in MBA, Executive Education and doctoral programmes. The learning objectives of this case are: to analyse the capital structure of the company, to interpret the relationship between financial leverage and risk, to assess the pecking order theory, to analyse the nuances of the aviation sector and the factors influencing the profitability of the companies in the aviation industry, to estimate the risks and the rewards associated with foreign currency loans, to evaluate the magnifying impact of the financial leverage and to propose deleveraging methods like sale and leaseback, debt conversion to equity and devise a revival strategy for the company.

The case discusses the dilemma faced by Naresh Goyal, promoter and chairman of Jet Airways (India) Limited. At the initial stage, Jet Airways, like many other companies in its growth phase, relied on borrowed funds to meet its investment needs. However, over-reliance on borrowed funds with just one equity infusion resulted in a high leverage ratio and an aggressive capital structure. Moreover, the company operated in a sector that was highly regulated, with competition that was cutthroat and a cost structure that was volatile. A high operating risk, coupled with high financial leverage, pushed the company into incurring losses. Having run out of cash, Jet Airways eventually defaulted on loan repayments to its lenders. Facing the eventuality of losing control of the company to lenders or to a strategic investor, Goyal was trying to figure out a way to save the company from insolvency and liquidation. It was becoming increasingly difficult for Goyal to keep Jet Airways, the company he had nurtured like a baby, airborne.

The case can be taught in both online and offline modes of delivery in a 90-minute session. Post-covid, the delivery mode of classes has changed. In online sessions, it may be a challenging task to ensure student participation.

Teaching notes are available for educators only.

CSS 1: Accounting and Finance.

Strategic management, system control management (balance score card).

Post graduate student, managers.

This case examines “Garuda Indonesia” the National Indonesia airline and its exceptional performance in recent years due to successful strategic decision making. This comprehensive case is structured in five parts highlighting: Garuda's recent success based on positive strategic management; Garuda's history and how it shaped its success against strong competition through effective leadership and the challenges it has overcome; an examination of the development within the Indonesian airline industry; a focused examination of strategic development with Garuda, including competition policy; operational planning and delivery; debt restructuring and product/service strategy; and an examination of the ongoing challenges, including governmental pressures and political maneuvering.

Students will identify opportunities and threats, including strategic issues derived from the external environment facing by Garuda Indonesia. Students will identify strengths and weaknesses from the internal environment faced by Garuda Indonesia. Students will develop strategic alternatives to inform business decisions. Students will give recommendations including priority planning for the next three to five years.

Teaching note.

Discussion of the case will enable the students to: ● use “Strengths, Weaknesses, Opportunities, and Threats” analysis. ● Use “pros and cons” analysis. ● Explain what constitutes an effective strategy. ● Analyze the quality of the strategy for IndiGo Airlines (IA). ● Explain sustained competitive advantage through value, rareness, imitability and organization framework.

This case describes a situation in which InterGlobe Aviation Ltd. (IGAL) has been experiencing multiple engine snags because of the faulty Pratt and Whitney engines. In a span of two years between June 2018 and January 2020, IGAL faced around 22 snags. IGAL is known to be one of the safest airlines in the world, the engine issue has tainted its reputation. In October 2019, in just one week IA faced four-engine snags, forcing the Directorate General of Civil Aviation (DGCA) to come out with a guideline in November 2019. The faulty engines were to be replaced by January 31, 2020. If IA failed to complete the task by the given deadline then IA would have to ground around 70–80 aircraft. IA was way behind the deadline when on January 13, 2020, they received an email from DGCA mentioning an extension of the deadline to May 31, 2020. The purpose of this case is to provide an opportunity for the participants to take into consideration the data given for IA and make assumptions and resolve the dilemma through which Ronojoy Dutta (Dutta), the Chief executive officer if IA is going through.

The case engages the participants in deciding a suitable course of action for IA to develop a strategy and is ideal to teach elements of strategy. The case can be used in the following courses/programs: ● A strategy formulation module in strategic management program or post-graduate program in management.

Teaching Notes are available for educators only.

CSS 11: Strategy.

Teaching Notes are available for educators only.

To appraise the product positioning in an emerging market. To recognize and discuss a positioning plan for a new product. To apply, describe the Kapferer brand identity prism along with different competition levels for Kingfisher Ultra Max. To deliberate the marketing mix for improving the sales of Kingfisher Ultra Max.

United Breweries Limited (UBL) was part of UB Group, which was a business conglomerate. United Breweries Holdings Limited or UB Group was headquartered at UB City, Bangalore, India. It dealt in many businesses, out of which UBL was one of them. Kingfisher Ultra Max was Kingfisher’s newest addition to the super-premium strong beer segment. It was a larger-based beer with 8% alcohol by volume content and was stronger in terms of alcohol content than Kingfisher Ultra, which was also from the super-premium segment. This brands positioning was such that it targeted the premium segment. The top management was considering a change in positioning for their Ultra Max brand. A research report submitted by a premier business school also recommended a change in positioning. The officials in the meeting are contemplating the two options for the shift in positioning; one is to make the change of positioning across India and the other is to make the change specific to some states.

The case is targeted at students of post-graduation and under-graduation programs in business administration, specializing in marketing management, brand management or marketing strategy. Also, the case study can be included as part of courses related to strategic management and competitive analysis.

Teaching Notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

CSS 8: Marketing.

Teaching Notes are available for educators only.

The learning outcomes of this study are as follows:▪ to analyze service attributes that influence customers’ decisions to purchase services;▪ to identify the factors that influence customers’ perceptions of service quality;▪ to identify the “moments of truth” that the service provider (IndiGo) would need to monitor and manage through the service encounter; and▪ to use the Servuction model to analyze the various elements of the service process.

In May 2022, the chief executive officer of IndiGo Airlines - India’s largest passenger airline by market share, Ronojoy Dutta, faced flak over the airline staff's handling of a specially abled child travelling with his parents on IndiGo Airlines. The staff member, reacting to the tantrums of the disturbed child, had refused to allow the boy and his parents to board the flight. He had cited the “risk to other passengers” from the boy as the reason for such a refusal (Biswas, 2022). In spite of the boy’s parents being supported by their fellow passengers, the IndiGo staff member refused to relent, and the flight took off without the trio (Firstpost, 2022). The incident goes viral when a fellow flyer shares a Facebook post describing it first-hand and provokes widespread condemnation of the nation's “preferred airline” (IndiGo, 2023) by citizens and politicians on various social media platforms besides Facebook (Gupta, 2022). Dutta initially supports his employee even as he issues a statement expressing his regret at the “unfortunate incident” (Business Standard, 2022a). The regulatory body for aviation in India, the Directorate General of Civil Aviation, imposes a fine of INR 5 lakh on IndiGo for denying boarding to a specially abled child (Indian Express, 2022). How could an incident like this impact the perception of IndiGo’s service quality? How could Dutta better ensure that IndiGo managed the various touch points with the customer over the entire service encounter – the “moments of truth”? How could he prevent such a fiasco in the future, ensuring that IndiGo remains India’s “preferred airline”?

This case is intended to be taught in an undergraduate or MBA marketing course in a module on service marketing. The case can also form a 90-min module in a service marketing course within an advanced management or executive education program.

Teaching Notes are available for educators only.

CCS 8: Marketing.

This case study focuses on four main areas. By the end of the study, the students are expected to meet the following objectives by answering several assignment questions: understand the general business of a maintenance, repair and overhaul (MRO) company and why this business is a central player in the air transportation industry; understand and integrate certain strategy analysis tools, particularly Porter’s Generic Strategies, Ansoff Matrix, GE/McKinsey Matrix and International Market Entry Modes, to use later as justification for any recommendations about strategy; and prepare a systematic elaboration to use to recommend the company’s strategic plan.

This case study discusses PT GMF Aero Asia, Tbk. (GMF), a company that is based in Tangerang, Indonesia, and involved in the MRO for airlines. At the time of writing this case, the CEO was Iwan Joeniarto. The case elaborates on GMF’s competitive business operations in Indonesia and Southeast Asia, with the main focus being a discussion of Iwan’s visions for GMF’s expansion into the Middle East. This case study challenges students to think critically on the strategy level about the expansion plans of a local company into the international market. The main research questions the study attempts to answer are: What is an MRO in the aviation business? How does it relate to airport megahubs? Is the option for business expansion into the Middle East feasible for GMF? If not, are there any alternatives for that international expansion? Moreover, what recommendations can this study provide Iwan for entering that international market successfully? The students are expected to gain exposure to the international market entry in an MRO business. The students are also expected to understand and integrate the different strategy analysis concepts and tools, such as Porter’s Generic Strategies, Ansoff Matrix, GE/McKinsey Matrix and International Market Entry Modes.

This case study can be used as teaching material in several programs, including – but not limited to – the followings: Bachelor’s Degree program in Management, Business and Marketing (usually final year students), Master’s Degree in Business Management or Business Administration and Executive Education Program/Workshop/Seminar/Training for Business Development/Marketing Managers, VPs, Directors and Aviation Management Professionals. This case study can be used in the following classes/subjects: strategic management, strategic marketing management, international marketing, international business, global marketing, operations management and aviation management.

Teaching Notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

CSS 11: Strategy.

SpiceJet came out with Big Sale offer in January 2013 in which the company offered 10 lakh air tickets for Rs. 2013 to travellers in Indian domestic civil aviation market. The promotion, aimed at increasing passenger load factor, generated wide publicity due to unprecedented nature of offer in highly competitive market. The case traces the history of promotions conducted by SpiceJet and examines the different aspects of promotion which become crucial while planning for promotions in service industry.

The AirAsia India 2017 (AAI) case presents the situation faced by Tony Fernandes, the CEO of the AirAsia group of companies, in 2017, when he had to respond to the changes in aviation policy made by the Ministry of Civil Aviation (MCA). As per the changes, an airline operating in India could start its international operations without having five years of domestic flying experience provided it deployed 20 of its aircraft or 20% of the total capacity, whichever was higher, for domestic operations. The objective of this case is to help discuss issues relating to sustaining late entry and exploring new growth opportunities in the context of regulatory changes.

Marketing.

This case can be used in a principles of marketing course, at Introductory, Executive or MBA level, it is particularly suitable as a case on promotions policy as one of the 4-P's, to illustrate the role of marketing communications as part of an integrated marketing strategy, or to illustrate the building of a service brand.

The case illustrates a number of practical marketing issues: the marketing challenges of launching a budget airline: gaining high visibility and awareness with a relatively low share of voice; the relationship between an organisation and its advertising agency; the requirement to maintain a consistent marketing strategy over time, but to adapt the execution as market dynamics impact the consumer. Given the dynamics of most industries, kulula.com cannot afford to be complacent, as new entrants are always on the horizon. The dilemma facing Gidon Novick and his team is to rethink the sustainability of its current strategy, how to grow and protect its position, as well as the relationship with its advertising agency and its communication strategy – is a more relevant campaign or a new agency required to keep the marketing communications interesting and current?

The expected learning outcomes are: to analyse the success of communications campaigns; to explore the issue of client/agency relationships; to understand brand building strategies, how to create a distinctive position, and how to build a services brand; To understand the key success factors for a low-fare niche positioning strategy, and to examine the sustainability of this low-fare strategy; and to identify some product line extension opportunities for kulula.com.

Teaching note.

This case details the history of Southwest Airlines from its inception in 1971 until 2004. The case provides details of Southwest's business model and reasons for its success. It ends with a description of the company's competitive pressures in 2004. The case can be used for a course in service operations or strategy.