Jet Airways is considering merging JetLite and Konnect into a single low-cost brand. Although no decision has been taken yet, the airline is evaluating options regarding a possible merger.
Eventually, the airline will have a single brand in full service and low-cost category, Jet Airways vice-president (investor relations) K G Vishwanath told analysts at a post-result conference call.
Jet Konnect is a no frills service launched by the airline two years ago. The experiment has been successful because the carrier has been able to use the same planes on a full service model or for a no-frills service depending upon the market conditions.
Since Jet Airways and JetLite (earlier Air Sahara) have separate operating permits, transfer of plans from one to another brand would require regulatory approval. Instead of doing so, the airline decided to create an another low-cost brand in the group. About 75 per cent of its domestic flights are now operated on the Konnect brand, but this figure varies from season to season.
JetLite was launched after the airline acquired Air Sahara. It operates 110 flights daily compared to 170 Konnect flights. The airline management also acknowledges that JetLite profitability in the first quarter came under pressure after other carriers dropped fares.
"JetLite is less immune to fare actions in the market,'' said the airline's vice-president (network planning) Raj Sivakumar.Mahantesh Sabarad, equity analyst in Fortune Equity (India) Ltd said JetLite has poor brand recall value compared to Konnect.
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He said 75 per cent of all Jet flights are on Konnect brand and it has not lost its market share.
"Certain costs, which are duplicated, like staff uniforms, in flight magazines can be avoided upon merger,'' he said on the advantage of a merger.