For Long Haul, Jet ‘Must Go Low-Cost’

Airline analysts and the founder of the country’s first low-cost airline have said that the full-service carrier Jet Airways should consider going the low-cost way for its sustenance. Jet Airways is witnessing one of its most turbulent times since its launch in 1995. The airline posted losses of 636 crore during FY18 on revenues of 24,510 crore. During the fourth quarter of that fiscal, it posted losses of 1,040 crore on revenues of 6,326 crore. For the first quarter of the current fiscal, losses widened to 1,326 crore on revenues of 6,257 crore. The airline also has the unenviable record of posting losses for five out of the last eight years. Its total debt is 8,150 crore as of March 2018. “Jet should completely overhaul and merge all operations into one low-cost carrier (LCC) if it wants to survive,” G.R. Gopinath, founder of the country’s first low-cost airline Air Deccan, said. His argument in favour of an LCC model is simple: the full-service business model in the domestic sector, where flights are typically between one and three hours, the CASK (cost per seat km) is higher than the RASK (revenue per seat km). In Jet’s case, it earns 4.21 per km from every passenger but spends 4.49 per km to earn it, resulting in a loss.