Jet Airways revises business model, stress on low-cost services
18 Aug 2011
Jet Airways (India) Ltd said it is actively considering a change in its current business model that will very likely see it offering increased low-cost services. Such a move, say market analysts, is likely to affect its profitability.
''With growth mostly coming from the low-fare segment market in domestic volumes, we, the board and the management of the company, are urgently addressing this issue and undertaking an in-depth review of the business model, including reviewing multiplicity of ''brands'' being offered in the marketplace, and will soon be making changes to enable us to compete more effectively and retain our dominant position in the Indian market,'' said Jet chairman Naresh Goyal on the side-lines of the company's annual general meeting in Mumbai.
On Wednesday, shares of the company ended 13.12% down, at Rs.304.70, on the BSE.
The company operates the full-service Jet Airways and has two low cost services in Jet Konnect and Jet Lite (India) Ltd. These two brands will merge under the Jet Airways Konnect brand.
Goyal let it be known that the company had already started working on the changes it wished to affect in its business model and that these would soon be implemented.
''The primary objective of this exercise is to evolve a model which is in sync with market realities,'' Goyal added.
Jet Airways reported a loss of Rs123.16 crore for the June quarter of the current fiscal as against a profit of Rs3.52 crore for the same periods a year ago.
