Jet Lite may fuel fresh round of price war

New Delhi: Jet supremo Naresh Goyal’s two-brand strategy — Jet and Jet Lite — has taken the low-cost airlines by surprise who expect discount fare war in the domestic market to continue for some more time, even as they gear up to fight a stronger competitor than Air Sahara.
Low-cost carriers would like to believe that Jet’s dual strategy could turn out to be double-edged. While formally taking on rival price-warriors in their own territory, Jet would be open to cannibalisation from its own “value” brand. Most industry players agree that the market is in no position to accommodate another low-frill player. Competitive fares would not allow yields to go up, while lean travel months would see higher discounting of fares.
LCAs also expect Jet to rationalise frequencies between some busy sectors — such as the Delhi-Mumbai route — to improve on its yields, and deploy them on under-served markets.
Analysts point out that expectations of low-cost carriers getting better valuations post Jet-Sahara deal, are unfounded.
Many in the industry feel that Jet’s dual brand strategy — which has not worked to great success in international markets — could only be a precursor to having two separate brands for domestic and international operations.
18/04/07 Sudipto Dey/Economic Times

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Categories: General Aviation Apr 2007, Jet Airways Apr 2007