India's Kingfisher Airlines plans to exit the country's low-cost market within the next four months and focus more on the premium market.
The company was started up as a full service operator, with its Airbus aircraft offering first class and economy class options on international and domestic routes.
However, for the last three years, it has also been operating ATR aircraft under the Kingfisher Red no-frills brand after buying low-cost carrier Deccan. High operating costs and low yields, however, meant that the unprofitable Kingfisher Red has been a drain on the full-service airline.
That has led to Kingfisher deciding to simplify its business model by phasing out Kingfisher Red and reconfiguring its ATR aircraft with economy class seats, its chairman Vijay Mallya said in a statement.
Some of the Airbus A320s that are all economy-class will have first class seats, but the number of first class seats in existing Airbus aircraft will be reduced and more economy class seats will be added.
This reconfiguration will be completed in four months, said Mallya. The move will add a significant number of seats and hence generate additional revenue at minimal cost, he added
"Over the past six months, Kingfisher Class (full service economy class of service) has generated higher yields and seat factors than the no frills Kingfisher Red class of service. Following re-configuration of all Airbus aircraft, the number of economy seats across the Airbus fleet will increase by approximately 10% and this capacity will be offered across the board as a Kingfisher Class full service product," the airline said in a statement.
"All ATR aircraft will continue to operate in a single configuration as a Kingfisher Class full service product. Judging from actual past performance, higher yields and load factors and increase in overall revenue are expected."
Source: Air Transport Intelligence news
