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Jet Airways considers merging JetLite with JetKonnect

26-Jul-2011 11:21 AM

Jet Airways VP Commercial Strategy and Investor Relations KG Vishwanath stated the carrier is in the process of discussing the possibility of merging JetLite with its other low-fare brand, Jet Konnect, stating the plan is to have "only one low cost brand and one full service brand" (Reuters/Live Mint/Business Standard/The Hindu Business Line, 25-Jul-2011). "We are still in the process of discussing whether there is a need to merge JetLite and Jet Konnect, but we are very clear that there will be only one brand in the low-fare arena and that is something which will emerge very clearly in the next one or two months." JetLite was formed after Jet Airways purchased the airline business of the Sahara Group in 2007. However, since the two carriers have separate operating permits, transfer of plans from one brand to another requires regulatory approval. As a result, the carrier created JetLite. JetLite operates 110 daily services and Jet Konnect operates 170 daily services. In domestic operations, Jet Konnect accounts for 75% of the flights while Jet Airways holds 25% of the group's domestic operations. Mr Vishwanath said that Jet Konnect and JetLite had cut fare levels below costs, and such irrational pricing continued to be a norm in the sector. “With such a pricing scenario it has become difficult for Jet Airways to increase fares to pass on the high fuel cost to passengers,” he said. The airline has no plans to increase fares as of now, he added.