The slide in market share to rivals like Spicejet, GoAir and even its own low-cost subsidiary Jet Lite (operates under the JetKonnect brand), has led the Naresh Goyal-promoted airline to announce up to 50% discounted fares on Thursday for both domestic and international routes. Jet, which posted a record R4,130 crore loss in FY14 and sold a 24% stake to Abu Dhabis Etihad last year for over R2,000 crore, has embarked on a three-year restructuring of its loss-making domestic business with a target to turn profitable by FY17.
This sale by Jet Airways is a first on two fronts it is the first sales initiated by a full-service domestic carrier, and secondly, it is also the first offered on international routes. Jet Airways, along with Etihad, is keen to build loyalty and increase their customer base and therefore are rewarding loyal flyers with double flying miles. We are certain that this discount of up to 50% by Jet and Etihad is going to see a sharp increase in bookings both for domestic as well as international travel, said Sharat Dhall, president at booking portal Yatra.com.
Jets slide in market share has been a gradual process. In fact, Jets market share in 2007 the year it acquired Air Sahara and turned it into Jet Lite, had stood at 32%. In January this year, Jet and Jet Lite together had a 25.2% market share.
In June, SpiceJet saw the single-largest gain of market share with a 1.1 percentage point jump over May, which could be attributed to the spate of aggressive discount offers announced since January this year for flyers who book early. GoAir also recorded its highest-ever market share at 10.1%, versus 9.8% in May, while Jet Lite saw a jump of 0.4 percentage points to 4.3%.
The increase in loads and market share for Spicejet occurred despite the entrance of a new airline, and the addition of capacity by other players in the market during the month of June. What is likely to have helped is the airliness new network and schedule, improved on-time performance and dynamic pricing, an industry analyst said.