Jet plans to merge its low-cost carriers

Mumbai: Jet Airways, the country’s largest private carrier by market value, is looking to merge its low-cost service Jet Konnect and its budget airline JetLite, once the ongoing legal dispute with Sahara Group is resolved.
“We will look at it (merger) once the time is right,” Jet Airways CEO Wolfgang Prock-Schauer told ET. It is not clear what the new brand name will be once the proposed merger goes through.
Sahara India had filed an application on March 26 with the Bombay High Court, claiming Jet Airways had defaulted on payment towards the purchase of Air Sahara. Jet acquired Air Sahara for Rs 1,450 crore in April 2007, and subsequently renamed it JetLite. The case is still being heard in the court.
The Naresh Goyal-controlled Jet Airways launched Jet Konnect in May to arrest the falling load factor on its full service airline. Jet was forced to start a new service, as the ongoing legal dispute with Sahara prevented it from transferring planes to JetLite, which is a separate airline. Also, to operate the flights under JetLite, it had to go through the time-consuming process of seeking regulatory approvals and air operator certificates. Instead, the loss-making carrier chose to start a new low-cost service.
In fact, Jet plans to transfer two-thirds of its domestic capacity into Jet Konnect by October. After the transfer, there will be 19 Boeing 737 planes and 10 ATR planes under Jet Konnect. JetLite, which posted a marginal profit of Rs 2 crore in the quarter ended June, has 23 planes in an all-economy configuration.
An analyst says it makes sense to fly with a single-brand rather two separate brands providing same facilities.
28/07/09 Mithun Roy/Economic Times

To Read the News in full at Source, Click the Headline

Categories: Jet Airways Jul 2009, JetLite Jul 2009