Jet Airways (JAI, Mumbai International) will phase out its low cost subsidiary, Jet Konnect (Mumbai International), by year-end as part of plans to reposition Jet Airways as a uniform full-service operator. Previous speculation had pointed to a possible sell off of the carrier to a rival low cost carrier.
Announcing a sixth-straight quarterly loss of INR2.18billion (USD35.6million), Jet Airways Chairman Naresh Goyal said the shift away from a dual-brand system was necessary as it had caused confusion among customers.
“The publication of our first quarter results shows we have made demonstrable progress in the implementation of our three-year turnaround strategy to return Jet Airways to profitability. However, there are still challenges in the very competitive market in which we operate. Our next critical step will be re-establishing Jet Airways as a master brand in India,” Goyal told The Hindu newspaper. “Over the next few months, you will see this brand reflected across our entire business. I give you my commitment, that by the end of the year, Jet Airways will have the best domestic full-service product in India. We will always be competitive to ensure our customers get the best value for their money.”
Thereafter, Goyal added, Jet Airways will compete with Indian budget carriers through careful management of its cost structures.
Jet Konnect's fleet of eighteen ATR72s, five B737-700s, four B737-800s and one B737-900(ER) will all be refitted with a dual-class configuration ahead of its redeployment on domestic flights.
While the airline has been affected by the intensification of a price war between India's carriers, management has not budged on a 2017 deadline to return to profitability. Among other measures that Jet will be implement are the restructuring of its debt, the sale and lease back of surplus aircraft and boosting frequencies between India and Abu Dhabi International, the hub of 24% equity partner, Etihad Airways (EY, Abu Dhabi International).
