Low-cost biz class fails to worry competition

Full-service carriers remain unfazed by the introduction of the business class segment by budget airlines.

Jet Konnect and GoAir’s launch of a business class segment, a first by low-cost airline carriers (LCCs), has failed to create much concern among full-service carriers (FSCs).

“The Jet Konnect flights with business class arrangement are connecting smaller cities and do not clash with our full-service Jet Airways flights. Also, on the prime sector, timings are different, hence, not impacting our business,” said a Jet Airways executive who did not want to be identified.

“Any business class flier in our airline will not be attracted to the LCC business class. Our business class occupancy will continue to remain the same,” said a Kingfisher Airlines spokesperson.

Jet Konnect, a Jet Airways brand, recently introduced a business class accommodation called Konnect Select in all of their 17 operational aircraft. The fares of these are 35 per cent cheaper than the business class in FSCs.

GoAir also launched ‘Go Business’ in all their aircraft. At just Rs 1,000 more than the low-cost GoAir fares, the airline provides priority check–in, complimentary food and no re-booking and penalty charges.

Jet has introduced eight premium seats in all 27 Jet Konnect aircraft and GoAir has introduced eight seats in all eight aircraft. Executives from both airlines confirmed the seats are booked.

“Our seats in this segment are flying with over 90 per cent occupancy and passengers are opting for it,” said a GoAir Executive, who did not want to be identified.

“We launched this only after feedback from our existing business class fliers, who wanted such arrangement in flights to smaller cities also and we are flying full,” said the Jet executive quoted earlier.

Industry sources also see a future for this kind of arrangement. “During the slowdown, many corporates shifted to low-cost and continue to fly LCCs. This sort of arrangement will draw them to these classes and bring revenue for the airlines,” said Bhawna Aggarwal, founding vice-president of Yatra.com, a travel portal

However, the other two LCCs, SpiceJet and IndiGo, are not upbeat about the idea and do not plan to copy it. “We do not plan to introduce any such inventory in our system. Our business model is low-cost and is doing well. We do not want to tinker with it,” said a SpiceJet executive.

Nor does Kingfisher Airlines plan to add a business class segment in its low-cost subsidiary, Kingfisher Red. “We also provide many facilities to our Kingfisher Red fliers which are not provided by other LCCs,” said an airline spokesperson.