Jet Air Aims To Up Domestic Low-Fare Capacity

18 August, 2011

Jet Airways , India’s largest airline by market share, aims to increase domestic low-fare capacity to 80-85 per cent of the total fleet from present 72 per cent, a top official said on Wednesday.

The airline is also considering more low-fare flights for short-haul international routes, Sudheer Raghavan, chief commercial officer, told reporters on the sidelines of the company’s annual general meeting.

In April-June, Jet had posted a much lower-than-expected net loss on better revenue and a one-time gain.

“Globally, the push towards low cost (airlines) is real. There will be a progressive transfer of capacity from the full service to low fare,” Raghavan said.

The company runs low-fare service under brand names Jet Konnect and JetLite and is in the process of discussing the possibility of merging the two.

The company management is undertaking an in-depth review of the business model, including multiplicity of low-fare brands being offered in the market place, its Chairman Naresh Goyal said in a statement.

The company will soon be making changes to enable it to compete more effectively and retain its dominant position in the Indian market, he said.

The officials, however, said the full service brand would continue to play a dominant role both in domestic and international space.

Cutting Debt, Interest Costs

The airline is in the process of converting a loan of about Rs 5 billion ($110.16 million) into dollar debt in the current fiscal year and plans to repay about Rs 15 billion ($330.5 million) of debt this year, said M. Shivkumar, senior vice-president – finance.

Jet has converted about Rs 25 billion ($550.84 million) of local currency loans to dollar-denominated debt from last October, he said.

The move would help the airline save about Rs 1.75 billion ($38.55 million) in interest costs in FY12, he said.

The airline had a debt of about Rs 133.7 billion ($2.94 billion) by end-June.

Jet had earlier this month signed a deal with Godrej Properties to develop part of the airline’s land bank in Mumbai into an office complex.

Shares of Jet Airways, valued at by market, plunged 12.96 per cent to close at Rs 304.55 on Wednesday in a firm Mumbai market.


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Jet Air Aims To Up Domestic Low-Fare Capacity

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