Business Standard

Jet to merge low-cost brands soon

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Press Trust of India Mumbai

Jet Airways today said it would soon have only one low-cost brand and that a decision on the merger of its present two low-cost subsidiaries -- JetLite and Jet Konnect -- would be taken within the next one month or so.

"We are still in the process of discussing whether there is a need to merge JetLite and Jet Konnect, but we are very clear that there will be only one brand in the low-fare arena and that is something which will emerge very clearly in the next one or two months," Jet Airways Group vice-president for commercial strategy and investor relations KG Vishwanath told the analysts on a conference call here today.

 

Currently, the two no-frills brands that Jet operates are JetLite, which it bought from Sahara Air, and Jet Konnect. During the June quarter, 75% of domestic revenue came from JetLite and the rest 25% from Jet Konnect, said vice-president for network planning, revenue management and distribution, Raj Shivakumar. But last year, Jet Konnect was offering more than two-thirds of the same, he added.

The country's largest airline by market share (25.5% as of end June) had on Friday reported a Rs 123.16 crore loss on account of a huge spike in fuel costs, which rose to 57% of the overall expenses of the Naresh Goel-promoted carrier.

The carrier had made a profit of Rs 3.52 crore in the year-ago period. The June quarter is considered the second best for local airlines, next to the October-December period. The loss was despite that fact that the airline had seen nearly 20.9% spike in revenues to Rs 3,321 crore, while jet fuel expenses shot up 57% to Rs 1,563.69 crore.

Vishwanath said the airline was looking at operating more flights to the Southeast Asian and the Gulf markets from the Winter season.

The airline has also decided to hold the fares at the current level, citing "irrational competition".

"The No 2 and No 3 airlines are dumping cheap seats into the market, leaving us with no room to up fares. But the current fare structure is irrational," he added.

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First Published: Jul 25 2011 | 9:15 PM IST

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