Fly single airline to limit losses: Crisil

With bad times showing no signs of going away for airlines, aviation industry analysts are coming up with possible exit routes which carriers can take to limit losses.
The latest in the line is Crisil which suggests that merged carriers should operate as a single full-service carrier (FSC) brand rather flying two separate airlines, one running the low-cost carrier (LCC) model and the other being an FSC.
Such a move would signal the death of brands like Deccan and Jetlite. Sudhir Nair, Head, Crisil Research, in his report says, "As the fare differential between the LCCs and FSCs has reduced considerably, the Kingfisher-Deccan and Jet-JetLite groupings could look at single brand FSC operations, which would not only help in yield management and reduce other operating costs, but also augment revenues on account of superior pricing."
An analyst with a foreign brokerage firm while agreeing with this assessment adds, "While it will surely help to increase yields, it should be noted that in the case of Kingfisher and Deccan, the differences in fares are higher than between Jet and JetLite. So it makes a lot of sense for Jet to have a single brand. The differential seems too low to justify two airlines."
10/07/08 Nirmal John/DNA MONEY/Sify

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Categories: Indian Aviation- In General Jul 2008