Jet Airways is reconfiguring its Boeing 737 fleet to add extra business class seats ahead of Tata-Singapore Airlines plans to launch a full service airline. The airline also plans to cut down flights on loss making domestic routes and is stopping all services to Bhubaneswar as a measure to arrest losses. The airline posted its worst ever consolidated loss of Rs 998 crore for second quarter of the current fiscal.
Jet Airways and subsidiary JetLite have 70 narow body Boeing 737s of different variants and are flown on domestic routes, Gulf and South East Asia. Thirteen planes from JetLite fleet and a few planes in Jet Airways fleet have eight business class seats. These planes will be reconfigured to add four extra business seats thus increasing the premium segment seating. A few Boeing 737s have 16 and 28 business class seats at present.
The reconfiguration exercise will happen over the next few months as the airline expects demand growth in business class and improvement in loads due to seasonality factor. Also the move will lead to improvement in yields as a business class ticket is priced four times higher than an economy class ticket. The airline has been unable to achieve a break even in last six months as fares were too low too recover operating costs. Increasing number of business class seats will also help increase the revenue which has remained flat in last two quarters.
Jet Airways has a market share of 24.6 percent and is the second largest domestic airline by passenger volume. Following the collapse of Kingfisher Airlines it has consolidated in the premium travel segment. However passenger growth has remained subdued and its loads in September were under 70 percent. "It is difficult to fill up economy class seats and filling up business class will be a challenge,'' an aviation expert remarked. The airline also faces fresh challenges and competition from Tata-Singapore Airlines which has announced it will run a full service airline. The Tata group airline hopes to start service by next May-June and is awaiting regulatory clearance.
A Jet Airways spokesperson did not respond to an email query on the issue.
Jet Airways is also cutting down flights on loss making routes. While complete details are not known the airline is suspending three daily flights to Bhubaneswar. The Orissa capital is linked to Mumbai, Bangalore and Kolkata. The frequency of flights to some other cities too is being curtailed.
Jet Airways earns about 40 percent of the revenue from domestic operations but the domestic network contributed to over Rs 600 crore of the consolidated loss in the second quarter. The average revenue per passenger declined, unit costs and the break even seat factor were much higher than the same period previous year.
Source: Business Standard
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