Jet Airways, India’s largest private airline company, shot up 5 percent during the early morning trade to Rs 318.4 per share today (18 August 2011) as it plans to change its business model by introducing more low cost and low fare flights. It also plans to cut costs and improve efficiency by increasing its use of information technology and lowering its distribution costs.
“The company plans to enhance its low cost offering to 90 percent from the current 70 percent, a move which is in accordance with the trend already visible in the market”, said an analyst.
Naresh Goyal, Chairman, Jet Airways commented that “with growth coming from low far segment market in domestic volumes, we are urgently addressing and undertaking an in depth view of the business model”.
For the June 2011 quarter, the company reported a loss of Rs 123.16 crore compared to a profit of Rs 3.52 crore a year ago owing to low fares and high fuel costs.
Incorporated in the year 1992, it was the first airline in India to operate the Boeing 737-400 aircraft in 1994. Today, it can boast of having one of the youngest aircraft fleets in the world with an average fleet age of 5.53 years. Some of its air-crafts include Airbus A330-200, Boeing 737-700/800/900, Boeing 777-300 ER and ATR 72-500. It currently operates 97 aircraft and flies to 75 destinations across the world.
In January 2006 Jet Airways announced that it would buy Air Sahara for $500 million in an all-cash deal, making it the biggest takeover in Indian aviation history, but the deal fell through in June 2006. However, on 12 April 2007 Jet finally agreed to buy out Air Sahara for Rs 1,450 crore ($350 million) after which Air Sahara was renamed as JetLite and was marketed as a low-cost carrier.
The company was founded by London based Naresh Goyal, a former travel agent. It had approached the primary markets in 2005 to raise $375 million to expand the airlines’ operations and pay off debt.
Updated Date: Aug 18, 2011 13:14:30 IST