Business Today

Jet readies to fly to smaller cities and towns

Following the successful business model of low-cost carrier SpiceJet, which is aggressively expanding into Tier-II and Tier-III cities, private carrier Jet Airways says it plans similar services to smaller towns, which it had neglected so far.

Sanjay Singh   New Delhi     Last Updated: September 21, 2011  | 11:38 IST

Following the successful business model of low-cost carrier SpiceJet, which is aggressively expanding into Tier-II and Tier-III cities, private carrier Jet Airways on Tuesday said it plans similar services to smaller towns, which it had neglected so far. This is also a desperate attempt by the airline to fly out of its losses. It had reported a net loss of Rs 123.16 crore in Q1 of 2011 against a net profit of Rs 3.52 crore in Q1 of 2010.

The mid-cap private sector carrier, which has an equity capital of Rs 86.33 crore, had increased its fuel surcharge by Rs 200 following the hike in jet fuel prices late last week. The burgeoning middle class is increasingly opting for air travel over rail, while growing demand is also being seen in smaller cities, driven by growing regional expansion, forcing airlines to touch these sectors, which have so far been neglected but are potential markets.

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"We have a huge middle class population in smaller towns and cities who can afford to fly and we will reach them. We will be expanding our operations to Patna, Dimapur besides other smaller cities in southern India. We will be adding and also enhancing our flights to these places later this year," Gilbert George, senior GM-India sales, Jet Airways told Mail Today on Tuesday.

"We expect to start on these new sectors during the festive season starting next month," George added as the airlines expect the domestic load factors to reach 85-90 per cent levels in the upcoming three months. October will mark the beginning of the festive season with Dussehra which will be followed by Diwali, Eid, Christmas and New Year.

The winter vacation for schools will also fall in December 2011. Typically, the July to September period is the low season for airline companies in India, while the October-December period represents the peak period.

The airline on Tuesday inducted brand new aircraft Boeing 737-800 - a 179 seater -to its fleet. The airline had ordered of these planes. It will receive three more by March 2012 and the remaining seven by March 2013. "We will currently use the newly inducted Boeing 737-800 for domestic as well as for Gulf operations," said George.

Courtesy: Mail Today 

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