SURVIVAL MODE: WILL JET DO AWAY WITH FIRST CLASS?
New Delhi,India : This may sound like a bitter pill for Jet Airways but the airline is now being advised to completely do away with first class seats on international routes to maintain a healthy balance sheet.
It has already begun reconfiguring economy class seating on its long haul flights to 10 seats a row against 9 abreast earlier and now needs to chop off the heavy and loss making front rows of the plane to improve yields further.
Jet reported a modest Rs 24 crore profit in the June quarter this year despite the troubles at Kingfisher Airlines, its key competitor in the corporate market. Its gross revenue per passenger increased by a modest 8.9 percent year-on-year during the quarter but the increase in international gross fares was slightly better at 11.8 percent.
Reuters
That Jet Airways has been unable to leverage this situation to deliver far greater improvements to revenue and its bottom line indicates a serious structural weakness and analyst projections vary over whether it would be able to report a profit for the full year in March 2013.
So restructuring international operations becomes crucial since about 60% of the airline’s topline comes from overseas flights.
“They (Jet Airways) should do away with First Class in international flights. Not only is it unviable, First Class is diluting the great Business Class offering Jet anyway has on its international flights,” Kapil Kaul of the Centre for Asia Pacific Aviation (CAPA) told Firstpost.
03/09/2012 : Sindhu Bhattacharya / First Post.Business.
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