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Jet Airways to switch to single full service model from Monday

By Aneesh Phadnis
November 29, 2014 10:39 IST
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To introduce 'Guest First' programme to attract corporate customers; its market share and load factor lower than rivals

Jet Airways will roll out a single full-service product from next Monday and stop its no-frills ‘Konnect’ offering. The move is aimed at boosting occupancy and increasing yields.

The airline had launched the Konnect service in 2009 to complement its full-service offering and Konnect now constitutes 60 per cent of its domestic inventory.

The airline is also planning a ‘Guest First’ programme to enhance passenger experience on-ground as well as on-board and is training its ground staff and cabin crew on the new service procedures. Changes are also being made to inflight menu and cabins are being spruced.

Jet hopes a single uniform service will help attract corporate travellers and arrest a slide in market share and load factor. It reported a market share of 20.5 per cent in October, compared with 25.2 per cent in January.

The airline did not respond to an email questionnaire on the topic.

The changes have attached costs. The airline will offer meals or snacks on all its flights, so the inflight catering cost will go up. Similarly, sales and distribution costs, will rise.

The Konnect brand was being offered on both Jet Airways and JetLite aircraft. The airline did not pay agents a commission for Konnect flights operated with JetLite aircraft. This would now change and agents would be paid commission on all flights, a source said.

“The increase in costs will be marginal. It will be in small single digits. However, the transition will have advantages of us. We will have a consistent product and there will be no brand confusion,” the source added.

The airline will also have to hire cabin crew, partly due to increased crew requirements on full-service flights and to cover for attrition. The airline has also deputed a large number of its cabin crew to partner Etihad on a six-month deputation, reducing the staff available for duty.

While Jet Airways lost domestic market share as it cut capacity, data provided by the Directorate General of Civil Aviation show it has been carrying fewer passengers per flight than its rivals. In 2013, Jet Airways reported a load factor of 71.5 per cent. Load factor is an indicator of occupancy and Jet’s loads were lower than GoAir, IndiGo, SpiceJet and only marginally higher than Air India.

Even in 2014, Jet Airways’ load factors are among the lowest in the sector and the achieved loads are far lower than what is required to break even on domestic routes.

The airline posted a consolidated loss of Rs 43 crore in the second quarter of FY15 but it did not give a break-up of domestic and international result.

One brand

  • The move is aimed at boosting occupancy and increasing yields
  • The airline had launched Konnect service in 2009 to complement its full-service offering
  • Now, Konnect constitutes 60 per cent of its domestic inventory
  • It is also planning to launch a ‘Guest First’ programme to enhance passenger experience
  • It hopes that a single uniform service will help attract corporate travellers and arrest slide in market share and load factor
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Aneesh Phadnis in Mumbai
Source: source
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