Tuesday, August 19, 2014

With Tata-SIA's Vistara, AirAsia set to fly, airlines eye losses as rivalry rises

Sensing stiff competition from Vistara, a full service offering by Tata Sons and Singapore Airlines, Air Asia India and four-five new airlines which could start operations from the next financial year, incumbent airlines are gearing up to meet the new challenges that could potentially widen their losses.
Naresh Goyal, chairman of Jet Airways, recently announced that his airline will close down its no frills service, Jet Konnect, to focus on a single brand full service carrier strategy to bring the airline back into profitability by the financial year 2017.
“Jet Airway’s economy offering will be defined and will be competitive with that of the other domestic carriers and low-cost carriers”, said James Hogan, chief executive officer of Etihad Airways and a member of Jet Airway’s board of directors, at a recent event in Mumbai.
Aviation experts note that while JetKonnect clearly needed to notch up more market share to break even, the advent of Air Asia India—known for its competitive pricing—could have persuaded the management to do away with segment altogether.
Jet Airways, which lost some of its market share to low-cost carriers, is looking to increase its market share in the full service segment, said Sharat Dhall, president of Yatra Online Ltd.
20/08/14 Financial Express
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