Jet Airways to hive off flyer plan; eyes 25% ancillary revenue by FY15

MUMBAI: Jet Airways today said it hopes to shortly hive off its loyalty programme JetPrivilege into a wholly-owned subsidiary in an effort to create a new revenue stream to complement topline which it plans double over the next two years.
We hope to make a final decision on creating our loyalty programme into a separate company in the next 45 days. We also hope to double our revenue from our ancillary business to around $ 300 million from $ 170 million last fiscal," Jet Airways Group Chief Executive Nikos Kardassis told reporters on the sidelines of launch of JetPrivelege-HDFC Bank credit card here.

Kardassis said the airline aims to garner around $ 300 million through ancillary route, which currently accounts for only 3 per cent of the revenue, by FY15.

The leading private airline recently initiated several measures to boost its revenue stream from the non-ticketing segment, which includes co-branding with several entities like banks, mobile phone operators, hotels and restaurants.

"Our target is to mop up around 25 per cent of our total revenue from the ancillary route, which could include on-board paid services, co-branding and seasonal marketing initiatives like branding aircraft, charging for ticket printouts among others," Jet Group Chief Commercial Officer Sudhir Raghavan said.

Globally, airlines net around 50 per cent of their topline from ancillary heads, he said.

At its annual general meeting on August 3, Jet had sought approval of its shareholders for setting up an aviation training academy and a marketing services company at an initial investment of Rs 50 lakh each.

"We have already received shareholders' nod. Now we are awaiting our Board to clear the proposal," Jet Group Vice- President (Marketing) Manish Dureja said.

Jet, which reported a surprising profit of Rs 36.4 crore in the June quarter after being in the red for the previous five quarters, has around 2.8 million members under its frequent flyer programme JetPrivilege.

"We aim to enroll about 10 million passengers to this programme in the next five years," Dureja added.

With domestic ticket prices at least 50 per cent lower than the other big aviation markets, the Indian carriers are looking at increasing ancillary revenue or non-ticket revenue to boost their bottomlines.