NEW DELHI: Realising that the economic slowdown has put low-cost carriers (LCC) at an advantage over full service ones, Naresh Goyal-owned Jet Airways has decided to expand its budget segment. The airline, which runs Sahara-turned-JetLite as its LCC, is now introducing another all-economy service – Jet Airways Konnect. Jet Konnect will operate 54 flights daily on 19 routes, connecting 38 cities with Jet livery from Friday. Jet Konnect-plus-JetLite will account for 45% of the group’s entire capacity.
LCCs enjoy nearly 40% of domestic market share, and it’s on the rise. This segment is led by IndiGo, followed by SpiceJet, JetLite and Deccan-turned-Kingfisher Red. Jet’s new brand, a no-frills, low-fare venture, where passengers will have to buy meals, will initially be operated with two Boeing 737s and six ATRs. Initially, Konnect will cover sectors like Chennai-Coimbatore, Madurai-Kochi, Mumbai-Ahmedabad/Bhopal/Udaipur and Bangalore-Pune/Mangalore.
Jet’s chief commercial officer Sudheer Raghavan said, “The full service flights on these sectors are getting only 50% seat factor. A lower fare would help us increase that.” Raghavan said while there was a lot common in the operational models of the two – JetLite and Konnect – there would be no overlapping as far as routes were concerned.
“There would hardly be any overlap between JetLite and Konnect. And even if there is any, we will ensure that the timings are such that there is no confusion and no cannibalisation,” the airline official said. Admitting that the slowdown had forced the airline to replace its full-service carrier with an all economy-class service on certain routes, Raghavan said, “Recession has played a significant part in this decision. But when there is a demand for a full service, we will definitely re-start it.”
Jet has drawn up plans for JetLite too. The budget carrier currently has a fleet of 23 aircraft – 16 Boeing 737s and seven CRJs. From 2009-end, 20 new planes, a mix of CRJs and ATRs, will join the fleet of JetLite in next three years.
Jet’s decision has come at a time when the slowdown has dealt a body blow to travel industry in general and airlines in particular. Relatively new LCCs like IndiGo and SpiceJet have been able to wean away fliers from full service ones. The Centre for Asia Pacific Aviation in a report predicted that there was hardly any market for full service domestic airlines beyond the six metros and that the future belonged to budget carriers.
Two independent budget carriers have been able to wean away a sizable chunk of the market as Jet and Kingfisher are still grappling with issues arising out of the acquisition of low cost carriers – Sahara and Deccan. “Jet and Kingfisher need to strengthen LCC business. Air India does not have a separate domestic low cost airline and does some domestic legs only as party of AI Express’ international flights,” said an airline official.
Source : Times Of India 08/05/09
British Airways (BA) on Tuesday said it is in talks with Indian carriers to forge an alliance, but will not make any equity investment in domestic airlines.
“We have held talks with Indian carriers, but talks so far have been inconclusive,” said Judy Jarvis, who has recently taken over as regional commercial manager, South Asia, British Airways.
She said talks are still on, but didn’t disclose the name of the potential partner and whether the airline is negotiating with a full service or a low-cost Indian carrier.
Ms Jarvis also declined to give details of the proposed partnership, but said it will not involve any equity investment by British Airways. At present, Indian rules don’t allow foreign airlines to hold equity in the domestic airlines or to operate in domestic routes directly. A government panel is currently considering the civil aviation ministry’s proposal to allow foreign airlines to hold up to 25% stake in domestic airlines.
Usually, a non-equity alliance between two airlines involve sharing of seats, complementing routes and technical collaboration, which together help airlines rationalise costs and offer fliers better value. In October, India’s two leading airlines, Jet Airways and Kingfisher, announced an alliance that would involve sharing seats, staff and infrastructure.
British Airways, one of the largest foreign airlines operating in India, recently pulled out of Kolkata, where it operated three international flights a week. Ms Jarvis said the company had no plans to further cut routes or flights, but is watching the market demand for reducing the number of seats being made available to the travellers to India. Following its exit from Kolkata, the company operates 45 flights a week from India.
The global manpower rationalisation plan announced by British Airways may also affect its Indian operations, said Ms Jarvis, but added that it will take more than a month to fathom the extent of the impact.
Indian aviation industry, like other world markets, is going through a turbulent phase. The economic downturn has taken its toll on air travel and many travellers have migrated from the pricier business class to economy class seats. Indian airline industry is estimated to post a loss of $2 billion for the year ended March 2009.
Ms Jarvis said her aim would be to consolidate British Airways’ position in India by focusing on better utilisation of resources and get more people to fly.
Source: The Economic Times 29/04/09
Jet Airways has expanded its ‘code-share’ agreement with Brussels Airlines to add the European cities of Marseilles, Toulouse, Geneva and Vienna to its existing international network.
Additionally current services on the Brussels-Lyon sector have been enhanced from three to six flights weekly, a company release here today said.
With this agreement, Jet Airways would further enhance connectivity between India and Europe by offering travellers convenient connections between Mumbai, Delhi and Chennai in India and 12 European code-share destinations, including Birmingham, Barcelona, Lyon, Madrid, Berlin, Paris Charles De Gaulle, Manchester, Hamburg, Marseille Toulouse, Geneva and Vienna via Jet Airways European hub in Brussels.
Jet Airways also offers European travellers pan-India connectivity with a 45-destination strong domestic network.
Jet Airways flies daily to Brussels from the three Indian gateway cities of Mumbai, Delhi and Chennai.
In addition, the airline also offers daily, direct services to London from Mumbai and Delhi, the release said.
Source: The Economic Times 20/04/09