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Jet Airways increasing low-fare capacity in reaction to industry trends


Jet Airways plans to increase domestic and short-haul international low-fare capacity in response to rising LCC competition in the Indian market. The move will entail a change in its current business model to be “in sync with market realities.” However, concerns centre on the potential pressure on earnings the shift in strategy could entail. [1905 words]

Unlock the following content in this report:


  • Up to 90% of capacity to be in low-cost medium in five years or before
  • Suffering from sharp drop in yields; Full service model viability questioned 
  • Potential profit pressure; Legacy costs a concern
  • Jet Airways considers merging JetLite with Jet Konnect
  • Jet Airways to add routes in Southeast Asia/Gulf in next six months; Europe expansion in future
  • Embarking on a cost-reduction programme
  • Jet Airways expects 2HFY12 to be better than in previous years

Graphs and data:

  • Monthly domestic India LCC penetration levels (%): Jan-2006 to Jun-2011
  • Asia Pacific domestic LCC penetration by capacity (seats): Seven months to Jul-2011
  • Intra-regional LCC penetration by capacity (seats): Seven months to Jul-2011
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