Jet eying low-fare market, moving for makeover

Airline is planning to sell planes and get them back on lease to generate additional capital

sweta-ranjan

Sweta Ranjan | January 24, 2012



Grounded by losses, Jet Airways plans to merge one of its subsidiaries, the budget airlines Jet Lite with another, Jet Konnect. The move is being seen as a business plan to revive the sinking Jet Lite. The company had acquired loss-making Air Sahara in 2007, branding it as Jet Lite.

Jet is believed to be trying to emulate rival IndiGo’s success in the budget air travel industry with the move. IndiGo has captured nearly 20 percent of the air travel market, flying past the biggies. Even the other budget airline Spice Jet, which has the second largest market share, holds 16.1 percent of the market, according to the data from the third quarter of the financial year.

Jet, shifting its focus to the low-fare market, wants to run its budget flights under a single brand. However, Jet Lite will be retained as a legitimate entity, while a shell company will be created to own and operate its planes under the Konnect banner.

As per the makeover plan, the Konnect brand is set to add 20 more planes to its fleet by the end of the year. And like Indigo, each plane will be 180-seater carrier. To brook losses, Jet also plans to sell off nine Boeing 737 planes it owns. A source from the airline company says that the aircraft will be sold and then get them back on lease in order to raise around Rs 666 crore to repay debts. In the quarter ending December 31, Jet’s losses stood at Rs 13,942 crore. The arrangement of selling and leaseback is done in order to generate additional capital. This move also helps reflect a healthier balance sheet as debts on the planes’ purchase are struck off the books. their books.

 

Comments

 

Other News

Yoga Day has changed perceptions about it in ten years: PM

The expanding awareness of Yoga over the past ten years has changed perceptions associated with it, prime minister Narendra Modi said in Srinagar on Friday on the occasion of the International Day of Yoga.   “Yoga is now emerging beyond limited boundaries. The world is witnessing t

Listening to tomorrow: The imperative for youth-driven data in India

Over a decade and a half ago when I was still a student, millennials felt the burning need to break down the barriers of gatekeeping in traditional media. Young voices, brimming with ideas and opinions, were often sidelined, their perspectives deemed too marginal or unrefined for mainstream discourse. This

Israel-Palestine War: Lessons from Past Peace Efforts

Israel-Palestine War: Give Peace a Chance By Dr. Joseph K. Thomas IndiePress, 243 pages, Rs 399 T

How inner work helps subvert painful narratives

Unashamed By Neha Bhat HarperCollins, 240 pages, Rs 499   * How do I connect better with my partner? *&nbs

Heatwave spikes power demand: measures taken to ensure supply

The Northern Region has been experiencing high power demand conditions due to a prevailing heat wave since May 17. Despite these challenging conditions, the highest ever peak demand of 89 GW in the Northern Region was successfully met on June 17. This achievement was made possible by import

PM to release 17th installment of PM-KISAN at Varanasi on Tuesday

Prime minister Narendra Modi will release the 17th instalment of the PM-KISAN scheme on Tuesday at Varanasi and more than 9.26 crore farmers will receive the benefits amounting to over Rs.20,000 crore. The PM will also distribute the certificates to more than 30,000 SHGs trained as Krishi Sakhis to work as

Visionary Talk: Amitabh Gupta, Pune Police Commissioner with Kailashnath Adhikari, MD, Governance Now


Archives

Current Issue

Opinion

Facebook Twitter Google Plus Linkedin Subscribe Newsletter

Twitter