All-economy is Jet’s mantra as profit lags

Mumbai: A tough economy is taking its toll on the plush in Indian skies. Jet Airways (India) Ltd, the country’s second largest airline group by passengers carried, plans to turn two-thirds of planes in its fleet into an all-economy and low-fare operation by October in an effort to stay afloat as passenger volumes contract and a glut continues in the number of commercial planes in India.
“Currently, one-third of Jet Airways capacity is operated under the brand of Jet Airways Konnect. By October, we will be increasing it to two-thirds by deploying 19 Boeing 737 planes and 10 ATR planes,” the airline’s chief executive officer Wolfgang Prock-Schauer said on Friday, adding that some international routes will be added to the low fare service.
Jet Airways currently operates a fleet of 83 aircraft in a full-service operation, while its low fare unit JetLite (India) Ltd runs 23 planes in an all-economy configuration. With a total 449 flights a day, the group recorded a 23.9% share of domestic air passengers in June.
With corporate traffic slowing and ticket yields coming under pressure, the Mumbai-based airline group has reported a Rs225.31 crore loss for the quarter to 30 June against a net profit of Rs143.38 crore for the year-ago quarter. The profit in the quarter to June 2008, however, was boosted by a reversal of depreciation.
Sales in the latest quarter slumped by 26.35% to Rs2,085.04 crore from Rs2,830.82 crore in the June quarter a year ago.
“There are no surprises in the Jet results. This is as per our estimates. The airline cannot do much since the passenger growth is falling down, except shift more planes to no-frill segment,” said an analyst with a domestic brokerage. He is not authorized to speak to the media.
According to the ministry of civil aviation data, passengers carried by domestic airlines in the first half of 2009 (January-June) stood at 21.09 million compared with 22.94 million in the same months of 2008—a contraction of 8.05%.
25/07/09 P.R. Sanjai/Livemint

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Categories: Jet Airways Jul 2009