Monday, July 14, 2008

Crude call: JetLite stops freebies

New Delhi: Spiralling costs and mounting losses have forced Jet Airways chairman Naresh Goyal to change his long cherished belief that a passenger is like a guest at home who can't be charged for the food served on board. From August 8, Jet's low-cost subsidiary JetLite will stop serving free water, toffees and snacks on its flights. While other LCCs (low-cost carriers) like IndiGo, SpiceJet and Deccan have long been selling snacks on their flights, JetLite will join this list now. Last month, SpiceJet and AI (domestic) had stopped giving free toffees.
"Our annual expense on snack boxes was over Rs 2 crore. We were only able to give cold snacks and water while there was a great demand for hot beverages and food. Now we will be able to offer a choice of hot snacks for a price of Rs 70 Rs 100," JetLite chief operating officer Rajeev Gupta said. Clearly, high losses have left airlines with no option but to look at every cost very carefully.
The Jet Airways Group including JetLite had reported a loss of Rs 654 crore in 2007-08, in which Jet Air's share was Rs 253 crore. JetLite's loss for this fiscal is estimated to be in range of Rs 550-600 crore.
The airline has already cut several flights and is also giving up expensive airport office spaces in some places where that work can be done at Jet's available offices.
14/07/08 Saurabh Sinha/Times of India
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