How Naresh Goyal Built Jet Airways

How Naresh Goyal built Jet Airways
Tara Weiss, Forbes July 24, 2007

Naresh Goyal might not have the height or the hair of Virgin founder Sir Richard Branson, but he's certainly got his fellow airline owner's charisma.
The founder and chairman of Mumbai-based Jet Airways was in New York for one of his "road shows," part of a campaign to introduce Americans to the 14-year-old airline that begins service from Newark, N.J. to Europe and India next month.
He met with reporters in his suite at the Waldorf-Astoria, showering them with compliments and hearty laughs.
He says he can't be compared to Branson because unlike his British counterpart, he's not the face of the brand. That may be true, but like Branson, Goyal built Jet Airways from the ground up.
Goyal started working in the airline industry right after college in his great uncle's marketing agency for Lebanese International Airlines. His salary was so low -- $40 per month -- that he had to sleep on the floor of his office.
But he moved up the ranks quickly, becoming a publicist for the airline and from there, moving on to other international airlines.
After a few years, he started Jet Air, a marketing organization that represented several international airlines in India. His mother sold her own jewelry to give him money to start the business.
In the early '90s, he looked into buying an airline in Scotland since there was no "national" carrier there, but his plan came to nothing. At home, though, things were changing.
From 1953 until 1992, the only airlines allowed to be based in India were owned and operated by the government. They were less than hospitable -- there were no printed schedules, and service was abominable.
"They [thought they] were doing you a favor to carry you from point A to point B," says Goyal. But when the government opened the airline industry to private competition, Goyal jumped at the opportunity.
"There was a huge market for good value and a high level of service in a marketplace that had never seen that before," says Bob Mann, an airline consultant with R.W. Mann & Company. "He got in front of the wave before it reached the shore."
Goyal now runs an airline that flies from India to 50 destinations. Starting in August, Jet Airways will have a European hub in Brussels.
Goyal still remains true to his marketing roots, which were showcased in a lavish press conference recently.
He might not be able to bring one of the airline's Boeing 777s into the Grand Ballroom of the Waldorf-Astoria to show off the upgraded cabins of Jet Airlines, but he did the next best thing: He brought life-size replicas of the cabins and showed off the flight attendants' newly designed mustard-colored ensembles.
Goyal markets service and comfort as the keys to his airline. For about $10,000, passengers in first class get a private suite, complete with closing doors; a full bed; a flat-screen television; and a meal that might be served at a top restaurant in any city. Business and coach offer levels of comfort too, with televisions and ergonomically designed chairs.
This isn't entirely new, says Mann. The Dubai-based airline Emirates and Etihad Airways, the national airline of the United Arab Emirates, both have first-class closed-door cabins. Plus, there's lots of competition from the likes of Virgin and British Airways, which also fly to India.
But with globalization and India's economy opening up, Goyal is counting not only on the Indian diaspora looking to travel around the world, but businesspeople who increasingly need to go to the Indian subcontinent for work. "The demand has been pent up for a long time," says Mann.
Goyal recently sat down with Forbes.com to discuss his airline's past and future.
Forbes.com: Are you the Richard Branson of India?
Goyal: No. I don't want to follow someone else, but he is a very dear friend of mine. We know each other through the industry. He's the best marketing person in airlines. He is the Virgin brand. I don't want to be the brand because an organization lasts longer than the individual. The institution is there for a long time to come, while individuals come and go.
Our airlines work together very closely. We bring traffic from India to London and transfer them to him. We have a commercial alliance.
How did you pick Newark as the first American destination for Jet Airways?
We found there's less congestion at Newark after you leave the airport than at JFK. Eventually we'll fly to both because both airports are important. If I have a choice, I fly into Newark.
After Newark, there's a lot more North American expansion planned. Some observers say it's too fast, but you don't agree. Why?
There is traffic already. You don't have to do anything and traffic exists. There are 2.5 million Indian-Americans living in the U.S. We want to serve that population. Also, Indian companies are becoming global. People in the west used to think India is something hidden. Today, U.S. companies have so much interest in India.
Next is Toronto on September 5. There are 800,000 Indians in Canada. We'll start service to JFK, San Francisco, Chicago and L.A. in the next year.
There are so many options in the airline industry. Why would someone pick Jet Airways?
Service is everything. I'm paying $750 per day to stay here [the Waldorf-Astoria Hotel] and there's lousy service. I ordered my breakfast at 9 a.m. and my breakfast never came. I went hungry. This would never happen in India. Hospitality is in our blood -- to look after our guests. Even if you come from a poor family, the lady of the house will offer you tea or coffee.
In terms of American passenger-airlines service, they dump people from one point to another. With us, you get a hot meal within a half hour of takeoff. It's a three-course meal in every section of the airplane -- even in coach.
What about pricing?
We are not here to get into fare wars. We are here to give you the best product, which hopefully no other airline gives you.


Your flight attendants are outfitted by a fashion designer, three-course meals are served in all sections and you're pouring Dom Perignon to passengers in first class. How can you afford that without raising prices?
Productivity. It's higher and better than other carriers. Our cost ratio in the aircraft is one of the lowest in the world. We have created high morale for our people. Our employees believe in the company. They believe it's their company. There's a feeling among employees that if the company makes money, it's their money and if the company loses money, that's their loss.
With your love of airlines, have you ever learned how to fly an airplane?
No, I can't even drive a car. I don't even know how to swim.
Why do you enjoy the airline industry?
It connects cultures. You make friends. And, of course, there's a certain glamour in this business.
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