JetLite to merge with parent carrier Jet Airways
Jet Airways announced that its board had authorized the amalgamation of the low-cost auxiliary JetLite with the parent airline. Shares of Jet Airways rose over 3% in trade after the announcement was made The merger is endeavored to strengthen the airline's resolutions to provide a "consistent, single-brand product and service...leading to a stronger market presence".
Air Sahara which was a part of Sahara Airlines (rebranded in Dec 2000) is JetLite's mother company. On 12 April 2007, Air Sahara was bought by Jet Airways for Rs.14.50 billion. Thus, Jet gained a domestic market share of ~32%. Air Sahara was renamed JetLite and the deal became official on 20 April 2007 after Jet Airways paid an initial sum of Rs.4 billion.
Before the deal in 2007 came through, Jet Airways had attempted their first takeover of Air Sahara on 19 January 2006, offering $500 million (Rs.20 billion) in cash for the airline.
Jet Airways in a structural rebranding decided to merge its budget JetLite with its no-frills brand JetKonnect. This is done to amalgamate both the arms and make one low-cost carrier brand. This was an indication of how JetKonnect had a more successful business-model and the one that the company wanted to take forward. However, JetLite would still operate under its own airline operating permits.
JetKonnect was launched in May 2009 as the low carrier arm of Jet Airways in order to compete in the no-frills category.
Unhappy with the Jet Airways' administration, pilots of subsidiary JetLite solicited a meeting with controller Directorate-General of Civil Aviation (DGCA) The meeting was due to the company's policy of six-month notice period ahead of leaving the company. They demanded its waiver. Over 70 of the 189 JetLite pilots had decided to quit to join Indigo and Vistara - the rival airlines.
Naresh Goyal-promoted Jet Airways officially began to discontinue JetLite by giving out its "full-service products" on all flights across the domestic sectors. The discontinuation process will take over a year to get implemented in entirety. The transit is a part of a board-approved sales strategy announced in August to facilitate the company's return to profitability.
Jet Airways decided to phase out Konnect in its bid to switch to a single brand and give "service continuity" to its international travellers. The move was to establish subsidiary JetLite's performance so that customers don't get confused with 2 low-fare carriers. Moreover, Jet Airways has been planning to transfer all its 18 ATR turboprop planes to JetLite (the plan has been on hold.)
