India’s Jet Airways, in which Etihad owns a 24 per cent stake, yesterday said that it would become a single brand by the end of the year.
Jet Airways currently operates as a full-service carrier and has an economy brand for its domestic operations called Jet Lite.
Jet’s single brand will have two classes on domestic flights, said Cramer Ball, the carrier’s chief executive-designate. The multi-brand strategy confuses users, he said.
The carrier yesterday reported a loss of 2.18 billion rupees (Dh131 million) during the quarter ended June. This was narrower, though, compared with a loss of 3.55bn rupees in the same period last year. Revenue for the period this year was 46.9bn rupees.
Jet's sixth-straight quarterly loss will prove challenging for Etihad, which has set a 2017 target to return the Indian airline to profitability, but Mr Ball said the timeline would not be changed.
Jet said that operations were hit by competition in the Indian market that has led to price wars among airlines.
Indian carriers have lost US$1.3bn in the financial year to March, according to Capa – Centre for Aviation.
Jet faces intensifying competition in its home market as more airlines start operations there. The Indian government has approved six new licences for carriers, most of which are expected to start operations next year.
Plans for Jet’s turnaround include restructuring debt, selling or leasing back surplus aircraft and increased flights between India and Abu Dhabi. Jet will also seek to reduce liabilities.
Etihad’s chief executive, James Hogan, previously said that there was no “exit strategy” for Jet. He also ruled out any future job cuts, a common cost-cutting practice Etihad has employed with its equity partnerships.
So far this year, Jet has laid off 40 cargo loaders and security personnel from Delhi, according to the Economic Times.
Etihad acquired its stake in Jet for US$380m and paid $70m for three landing slots at Heathrow airport through a sale and leaseback agreement last year. Another $150m went to Jet as an investment in its frequent flyer programme.
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