Jet Airways’ low cost brand-JetKonnect – that had given flight to the full-service carrier’s revenues during the downturn in the aviation sector in the last two years, will fly into the sunset as its raison d; etre itself ends.
A senior Jet executive, who did not want to be named, told DNA Money the airline was looking at phasing out the no-frills brand from 2011 as business travel makes a comeback.JetKonnect was launched in May last year.
Another reason for the gradual killing of the brand, he said, was increased focus on its second low-cost brand JetLite, which is being operated by its subsidiary JetLite Airlines.
“We are meeting the targets for the same (business class seat sales) and we are now contemplating to phase out JetKonnect from the market,” said the Jet official.
He said JetKonnect was a temporary measure to prop up revenues when the demand for premium travel had dipped.
However, with a reversal in that trend, the company is looking at returning to its old full-service carrier model, which offers better margins.
“One of the major reasons for initiating a separate brand was that our business class model was not generating revenues for the airline and we decided that we can configure a few aircraft and sell it as a separate brand,” said the top official.
Apparently, the Naresh Goyal-owned airline is undertaking a massive rebranding exercise for JetLite, which will involve replacing old aircraft of the budget airline’s fleet with new ones.
And this would mean the death of JetKonnect, which did not have much brand recall but was cannibalizing the JetLite brand. “We will be replacing out 5-6 of our JetLite aircrafts in the coming year and these will be the newer aircrafts with winglets,” said the official.
He said once the planes join the fleet, Jet will promote the JetLite brand more aggressively and slowly smother the JetKonnect brand.
“Once these come in, we will want this subsidiary, to be more prominent among our customers and we will start the re-branding process,” said the Jet official.
Responding of email queries on the subject, a Jet Airways spokesperson did not comment on the phasing out of the JetKonnect brand but confirmed replacement of six old aircraft with new ones this year.
“The reason for this is that, the older aircraft are being redelivered as their lease terms expire this year, and we don’t wish to extend the lease terms due to the age of the aircraft, commercial terms and the higher maintenance costs. Therefore, in order to maintain a younger fleet we are considering inducting newer aircraft in place of those being redelivered,” she replied.
Analysts said the demise of the JetKonnect would not have any drastic impact the Jet’s business.
“The brand, as it is, did not have much recall. With the premium travel picking up an demand being relatively price inelastic, the market share and revenues of the Jet will alter much if JetKonnect goes out of the market,” said an analyst , who did not want to named.
As per ministry of civil aviation data, in December Jet and JetLite market share was 19% and 7.2% down from 19.5% and 7.5% respectively in November.
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