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Analysis: Jet Airways re-configures its Boeing 777-300ER economy class seats to lower costs

When India’s largest full service carrier Jet Airways announced that it was reconfiguring its fleet of five Boeing 777-300ER aircraft, it was a part validation of Bangalore Aviation’s suggestion made in March of this year.

Jet Airways will be switching its Boeing 777-300ERs from a 9-abreast 3-3-3 seating configuration in economy class to a 10 abreast 3-4-3 seating configuration. The move will lower the width of Jet Airway’s 777-300ER economy seats from the current comfortable 18.5” to a narrow 17”. The move will increase the economy class seat capacity 13% from 274 to 310. Business class remains at 30 seats and the extra-heavy First class suites at 8.

The aircraft will be entering service first onto Jet Airways’ multiple routes to London Heathrow. The newly reconfigured aircraft will be placed onto Jet Airways Flight 122 Delhi – London Heathrow on 16th October, onto Jet Airways Flight 118 Mumbai- London Heathrow (afternoon) from 1st November, and onto Jet Airways flight 120 Mumbai – London Heathrow (overnight) from 15th November. Mumbai-Hong Kong resumes with the 777-300ER this winter, but no confirmation as to whether it will stay that way with the new Airbus A330-300s coming on board. A similar question surrounds the current thrice weekly Mumbai-Brussels-Newark 777-300ER service, for which no announcement has been made in terms of adding the reconfigured 777-300ERs to the route.

While a certain degree of passenger comfort will be sacrificed because of the move, ultimately it was necessary for Jet Airways in its fight to compete with the large UAE carriers Emirates and Etihad, both of whom configure their 777-300ERs with 10-abreast economy class seating.

This denser configuration leads to lower seat-mile costs for these two airlines, which in turn leads to lower fares (if your costs are lower on a per seat basis, then you will offer lower fares to try and fill up your plane and maximize profits).

Ultimately, what this move will do is reduce Jet Airways’ per seat costs by more than 12%, which will allow it to more effectively compete with Emirates and Etihad. Emirates essentially operates the A380 on its Mumbai-Dubai-London routes (the vast majority of flight time is on the A380 on the Dubai-London leg.

With either 499 or 517 seats, Emirates’ A380s have more than 30% lower seat mile costs than Jet’s 777-300ERs. Thus from a simple competition perspective, Emirates can offer much lower fares profitably on the same route than Jet can. In a price sensitive market like India, it is often more profitable to offer lower fares than to have excellent service.

We do feel that it was a mistake for Jet to only go part way, and not strip these 777-300ERs of their 8 first class seats, which are reportedly so heavy that they don’t allow Jet to do Delhi-US nonstops, which the 777-300ER’s less powerful cousin the 777-200ER easily makes for United Airlines.

However, given that First Class loads are reportedly very good to Heathrow, perhaps Jet Airways can opt for a split fleet of 777-300ERs, 4 with first class to cover the Heathrow route and 6 others reconfigured into a two class configuration keeping the 3-3-3 economy class configuration but adding 5-6 more rows to provide the same boost in seating capacity and reduction in seat mile costs.

There is no question that this move will degrade Jet Airways’ strong passenger experience to some degree; a narrower seat is just plainly more uncomfortable. We are of the opinion that this move will affect Jet’s ability to continue to charge a premium for its economy class product and will move some of the Jet loyalists away from the airline. Jet Airways should consider offering about 18~27 (2 or 3 rows) seats in the 9 abreast seating as a premium economy class, to cater to the higher class leisure traffic that it attracts today.

Right now, our thinking is that the lower costs will outweigh any fare and comfort degradation, but it remains to be seen what will occur.

About Vinay Bhaskara

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