Since May 8 this year, a curious new bird has been flying on Indian skies. Maverick businessman Naresh Goyal has sprung a surprise by launching a new low-fare flying service, Jet Airways Konnect, by taking away half the number of flights from his flagship brand, Jet Airways. And he has done something normally unthinkable — he has ripped out the business class and replaced it with economy class seats. Then, in a complete break with his business philosophy, he made Jet Konnect a low-cost carrier (LCC), setting prices that compete with the likes of SpiceJet and Indigo.
Two months ago it didn’t exist, but today, Jet Konnect is becoming an important part of Jet’s strategy to ride out the slowdown in air travel, and could soon begin to overshadow the mother brand in number of flights. The fledgling airline, which started with 54 flights a week, has now raised the number to 125. It plans to go up to 160 flights in a few months. Compare that with the 110 that Jet Airways flies. Why should Goyal, who has scant respect for the low-cost model despite running Jet Lite as an LCC, strip the airline of the lucrative J Class seats and then set up seats that fetch much lower returns? For instance, a passenger flying on Delhi-Mumbai, the busiest air-corridor in the country, pays about Rs. 20,000 for a business class ticket while the economy traveller pays only about Rs. 4,000. Of course, the fares are dynamic and the airlines keep coming up with new schemes and discount to nudge sales, but the differential between the classes is about 5:1. So whatever happened to Goyal’s belief in extracting premium fares from the high-fliers?
Goyal considered other options including moving some of the Jet Airways fleet to JetLite. The trouble, however, was that transferring the aircraft leases to the subsidiary company was not only time-consuming but would also need the regulator’s clearance.
(This story appears in the 31 July, 2009 issue of Forbes India. To visit our Archives, click here.)
Hi Lubna, There are a *lot* of Jet Airways elites (frequent fliers) who feel the same way as you do - I am one of them. There has been a steady move to JetKonnect anything that moves, apparently, and we (loyal Jet fliers) will end up with no full-fare service domestically in India, due to "catering to the masses". You might wish to check out the Airlines of India forum on FlyerTalk, where a lot of the banter regarding this is taking place. One thread is: http://www.flyertalk.com/forum/airlines-india/954974-jet-konnect.html I seriously fail to understand why Jet is trying to behave as a LCC - because they should be doing this system-wide and not just for their domestic passengers!
on Sep 25, 2009This move may help Jet airways, it certainly hasn't helped its customers, at least I am having second thoughts of flying Jet. <br /> I have always been loyal to Jet airways, since it was launched and have not flown any other airline, but these days I find them slipping badly on two counts:<br /> 1) Flights get clubbed. You are not given the choice of a later flight, but forced to hurry through meetings and catch an earlier flight. And you are informed of it (at least you are informed about it) a few hours before the flight. What if you are in a meeting and cant' take an anonymous call from the Jet call centre????<br /> 2) Only on reaching the airport do you suddenly find that you are not flying Jet but Jet Konnect. This after trying to find out what on earth happened to your flight!<br /> I hate the fact, that Bangalore is singled out as a non-metro city where the Jet Konnect plan has now been put into action. Perhaps it is going to be bye-bye Jet for me, for now.<br /> I agree with the views of Perry Flint, all that Jet may find is loss of its frequent flier passengers!
on Jul 23, 2009