New Delhi: The Naresh Goyal-promoted Jet Airways today said its board has approved merger of the low-cost subsidiary JetLite with the parent airline.
The merger, which is subjected to regulatory and other approvals, is aimed to further strengthen the airline's efforts to provide a consistent, single brand product and service offering across the network, leading to a stronger market presence, a statement issued by the private carrier said.
"Jet Airways has made demonstrable progress in the implementation of its three-year turnaround strategy with the objective of returning to profitability.
"The merger of JetLite into Jet Airways is a key step to strengthen Jet Airways' operations and create a seamless organisation, delivering exceptional service to its guests," Jet Airways chairman Naresh Goyal said.
Consequent to the merger, JetLite will become part of Jet Airways and operate as a separate division of Jet Airways, the airline said adding this will result in more focused operational efforts, realising synergies in terms of compliance, governance, administration and costs.
Jet Airways had bought Sahara Airlines in April, 2007, for Rs 1,450 crore after an arbitration award. It later
renamed Sahara Airlines as JetLite and operated it as a low-cost arm till November last year.
At present Jet Airways and JetLite operate under two different Air Operator Permit (AOP).
The merger approval by the board is subject to compliance with all applicable laws and regulations and the receipt of all corporate, regulatory, governmental, judicial approvals and third party consents, Jet Airways said.
The Boards of Directors' approval today follows the earlier decision taken by Jet Airways to streamline and align its domestic operations, creating a strong, uniform Jet Airways master brand and implementing a consistent, full service, single brand strategy across the entire domestic airline operation. This move has been very well received by guests and stakeholders, the company said.
The three-year turnaround strategy and synergies from the strategic alliance with Etihad Airways have gained further momentum with a demonstrable positive impact on the business.
Jet Airways had reported a consolidated net profit of Rs 226.4 crore for the first quarter ended June 30, helped by higher revenues and increase in passenger traffic.