One of the important performance parameters in the aviation industry that also have a bearing on cost calculations is capacity utilisation. This refers to the ability of an airline to use its fleet in the most optimal way to maximise its revenues. By doing so, airlines obviate the need to invest more in the purchasing aircraft. Jet Airways of India has made a declaration to increase its capacity utilisation of Boeing 737 for the same purpose.
The carrier currently uses this model to fly on domestic and some international routes. With the domestic traffic growing at over 20 percent, it felt a need to gain new customers by increasing the frequency on the existing routes and adding new ones. The carrier currently has a fleet of 116 aircraft that includes single-aisle Boeing 737s and 777s, and Airbus A-330s. While the airline has ordered new models, these will be replacements for some of the older ones. As a result, the fleet size will not increase; hence, a need to increase their utilisation was felt. To meet this, the company is set to hire 400 pilots in the next 18 months.
JetLite Merger
JetLite, the former low-cost subsidiary of the airline, is to be merged with the parent company. The approval of equity shareholders to this effect has been granted. It is noteworthy that the board of directors of the two companies had moved to merge the two entities, way back in September, 2015. As per the terms of engagement, the equity shareholdings of the two will be cancelled without any financial gain. The flying permit of the LCC will be retained, and it will be operated as a separate division of the parent airline. As a result, by booking flight tickets with the subsidiary, passengers will be able to enjoy the same luxury as on the primary carrier.
In terms of passenger market share, the two companies together hold about 20.9 per cent, which is the second highest after IndiGo. Combined synergies are also expected to reduce costs and improve the passenger load factor, which signifies the seat occupancy rate. As JetLite is a full-service carrier now and is engaged in route planning and cross-selling with its parent company, this merger will give a higher level of efficiency.
With these strategic decisions to enhance the operational efficiency, Jet Airways of India is aiming to increase its passenger market share and revenue.
The carrier currently uses this model to fly on domestic and some international routes. With the domestic traffic growing at over 20 percent, it felt a need to gain new customers by increasing the frequency on the existing routes and adding new ones. The carrier currently has a fleet of 116 aircraft that includes single-aisle Boeing 737s and 777s, and Airbus A-330s. While the airline has ordered new models, these will be replacements for some of the older ones. As a result, the fleet size will not increase; hence, a need to increase their utilisation was felt. To meet this, the company is set to hire 400 pilots in the next 18 months.
JetLite Merger
JetLite, the former low-cost subsidiary of the airline, is to be merged with the parent company. The approval of equity shareholders to this effect has been granted. It is noteworthy that the board of directors of the two companies had moved to merge the two entities, way back in September, 2015. As per the terms of engagement, the equity shareholdings of the two will be cancelled without any financial gain. The flying permit of the LCC will be retained, and it will be operated as a separate division of the parent airline. As a result, by booking flight tickets with the subsidiary, passengers will be able to enjoy the same luxury as on the primary carrier.
In terms of passenger market share, the two companies together hold about 20.9 per cent, which is the second highest after IndiGo. Combined synergies are also expected to reduce costs and improve the passenger load factor, which signifies the seat occupancy rate. As JetLite is a full-service carrier now and is engaged in route planning and cross-selling with its parent company, this merger will give a higher level of efficiency.
With these strategic decisions to enhance the operational efficiency, Jet Airways of India is aiming to increase its passenger market share and revenue.
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