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Mumbai based Jet Airways is moving operations of 63 domestic flights from its low fare Jet Konnect service to its full service operation under Jet Airways.
Some of the sectors which will see this change are :
Delhi-Pune, Delhi-Bangalore, Delhi-Chennai, Delhi-Kolkata, Delhi-Hyderabad, Mumbai-Ahmedabad, Mumbai-Pune, Mumbai-Chennai, Mumbai-Kolkata, Mumbai-Mangalore, Mumbai-Hyderabad, and Mumbai-Kochi.
During the height of the economic slowdown in 2009, Jet Airways moved over 220 of its 390 flights and launched the no-frills Jet Konnect service in order to retain passenger share. This was in addition to Jet’s other low cost subsidiary JetLite which still operates about 110 flights a day.
The changes are from October 1, 2010 till February 28, 2011 and from April 16, 2011 to June 30, 2011. The winter season is a peak travel period as millions of Indian diaspora come to India for vacations, and the summer period is when most Indians take their annual holiday.
It is a smart move by the carrier.
With an essentially full-service airline organisational and operational structure, Jet was unable to reduce costs to match the low fare leaders IndiGo and SpiceJet whose cost per available seat kilometre were about 30% lower that Jet Konnect.
With the Indian economy growing at 8.5% annually, corporate demand has returned. Corporate travellers want their frequent flier benefits and are returning to full service carriers.
However, with the economic recovery in Europe and North America still subdued, Indian businesses are very cautious investing in new capacity, which makes the renewed demand, soft.
Having burnt themselves in 2008 and 2009, airlines are still treading cautiously. From over 66% of its 500 flights in the low fare segment, the Jet Airways group will move to a more balanced 50-50 split for the peak periods. Also, by selectively moving these flights back to the full-service Jet Airways, the airline will be able to command the 12%~15% higher fares without a significant increase in costs, during the peak demand period, and will revert to low fare Konnect service during the lean times.
Sort of having your cake and eating it too, but then, no one has ever doubted the business acumen of Mr. Naresh Goyal and his team.
