Jet Airways to go for Cost Cutting
Jet airways has set for itself an ambitious target of saving $70 million in the next financial year by way of cost cutting drive. The load factor of jet is under pressure. At present the occupancy rate is about 65 percent. The cost cutting drive is being planned to cope with the competition posed by the new entrants in the aviation industry. The market share of Jet is being eaten up by new low cost carriers.
The management of the company believes that 80 percent of the costs are not dependent on the business model of the company and they are looking at cutting these costs. Recently the company had reported a loss of Rs. 55 crores in the quarter ended on 30th September 2006 due to increase in fuel and personnel costs and reduction in margins.