Jet throws down gauntlet to Kingfisher

Singapore
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India's Jet Airways is planning to revamp its newly acquired Air Sahara domestic subsidiary and expand its international operation.

Air Sahara, currently a full-service airline, will soon be renamed JetLite and its operating model will be changed. Jet says the carrier will be positioned between full-service and no-frills carriers in the fast-changing Indian market.

JetLite will charge higher fares than no-frills carriers such as Air Deccan and SpiceJet, but lower fares than mainline Jet Airways or Indian Airlines. JetLite will have some frills such as in-flight entertainment and complimentary food and beverage services, which will put it in direct competition with aggressive competitor Kingfisher Airlines.

Kingfisher has been eating into Jet's domestic market share over the past two years with an attractive economy class product. Kingfisher also has been eating into Jet's higher-yielding business with a premium product that has been winning new customers.

Jet, India's largest privately owned airline, originally agreed to buy Air Sahara last year for around $500 million but the deal collapsed, leading to a bitter legal battle between Jet and the Sahara Group. The deal was revived in April when a reduced price of $340 million was agreed.

Jet says Bombardier CRJs will be phased out of the Air Sahara fleet and the carrier may instead use ATR turboprops, which Jet already operates. It will still operate Boeing 737s, but all international services will be dropped.

Jet, however, is aggressively expanding its own international operation and has just taken delivery of its first purchased widebodies, two-class Airbus A330-200s and three-class Boeing 777-300ERs. Jet is introducing a first-class product on the 777s, with suites featuring sliding doors, 23in flat-screen televisions, a seat for visitors, a personal wardrobe and unhindered seat access. The new cabin is part of a master plan to relaunch the airline.

Jet says the widebodies will be used on new services to Africa, Asia, Europe and North America. North America services, initially to New York, will be operated via Brussels from August. A partnership has been agreed with Brussels Airlines that will include codesharing.

Services to Toronto via Brussels will be added later this year and Jet is also planning a widebody service to San Francisco via Shanghai.